I spent a few years of my life staring at this exact effect. I was working on building a big industrial inkjet printer. The physics behind it is cool too, but not new. Lord Rayleigh first described it in 1878. Not exactly a glitch in the Matrix :). I have a patent somewhere on a minor tweak to the concept, but can't find it right now. Good times.

More info:

Just to clarify for everyone assuming that this is an optical illusion. It's not. The subwoofer is actually creating vibrations in the water stream that increase exponentially as the stream travels until their magnitude is larger than the diameter of the stream. At this point, the stream breaks up into drops. If you do this with a coloured stream of water (i.e. ink) and run a piece of paper under it, you will see individual drops of ink hit the paper.

There are two types of inkjet printers. The most common is what you see in household inkjet printers, it's called Drop-on-demand. You spit out a drop by doing something to the ink. Ofter you heat up a resistor, converting some of the ink to steam and pushing out a drop of ink.

The other type is called continuous inkjet. The way this works is you have a stream of ink, you stimulate it at some frequency which gives you drops at that frequency, and then you select some drops to hit the paper and others to miss.

The project I was working on used conductive ink and selectively charged the drops before sending them between two oppositely charged plates, sort of like a cathode ray tube with ink drops instead of electrons.

It was ridiculously cool technology, and a lot of fun to work on. The printer we were designing (never got to market in that incarnation) would have had paper going by at ~6 meters/second with very high quality, totally variable output. I thought we were going to disrupt offset printing in a big way. Sigh :).

[edit] Ooo, found the patent. Great bedtime reading if you're interested: http://bit.ly/HXc6o2