Plasma effects have been popular eye candy in computer games and demos since the late 1980's. They are also commonly implemented in visualization plugins such as Geiss, G-Force, and Whitecap. Plasma effects can create smooth-flowing hypnotic color gradients.
A consise anatomy of the popular plasma "fire" effect is as follows:
0. Plot a single line
of "firey colors" across the bottom of the screen.
1. For each pixel
on the screen (going across and down): Find the average color of the pixel and its 8 adjacent pixels, and plot a pixel of the average color above the pixel you were just considering.
2. Continue ad nauseam
The result will be an upward flow of plasma fire. A more generalized (and interesting) effect would flow in various directions. Consider a model where each pixel has a destination pixel. This is a field of 2D vectors. You could make all the vectors point outwards for an expanding effect, or you might perturb them on the fly for some amorphous psychedelia.
Another obvious improvement is to initially draw things more interesting than just static lines. For example, Geiss sometimes plots real-time sound waveforms on the screen to seed its effects.