MiikaH is doing some eye-popping experiments with dynamic mesh painting.
This system allows you to "paint" textures with other animated objects or particles. The "canvas" can be any mesh and it can even be animated. You can also specify colors for painter objects. Result will be saved as an image sequence that can be used on canvas as texture to produce preferred effect.
However, this project is still in very early stage so there is no downloadable build or patch available anytime soon. Test builds (Windows) and patch code are now available!
Displacement map painting
Mesh Paint Sub-steps