This research work addresses the simulation of bleeding and other visual effects for virtual reality (VR) based surgical trainers. VR-based systems have been proposed for surgical training following their huge success in flight simulation. Visual effects such as bleeding increase the visual realism of such simulators. The bleeding simulator developed here is a part of the larger laparoscopic inguinal hernia simulator project. Since the anatomy of the inguinal region is very complex with vital organs, vessels and nerves, bleeding simulation is particulary important to train the surgeons from making a surgical error in that region. Hence, they also have the potential to increase the effectiveness of the training. Previous research work in bleeding simulation are very elementary, though an in depth research has been done in the area of realistic fluid simulation. We have developed a physics-based approach for the simulation of arterial and tissue bleeding. The frame work for bleeding is generic enough, so that it is extended to simulation of other visual effects such as cauterization, irrigation and suction. Collectively, we call them the special visual effects for surgical simulation. All of these training modules are an integral part of the virtual surgery simulator. This is the first time when all the training processes have been simulated in an integrated fashion.