I was curious as to how sparks in movies are done. Lets say in the typical scene where the hero is fleeing the sinking submarine, water and sparks flying in the background. Is there a special machine? Or is some Effects technician hiding up there with a welder?

Any time you have something that is potentially flammable on the set it is considered pyrotechnics for which you require a registered technician.

There are pyrotechnics products that can accomplish this, or, as you say, having a real arc welder (though I imagine this is probably as dangerous as having a sparks package) doing their thing in the background. With a pyrotechnics package and technician you would have more control, though.

Do a google search for "sparks" "FX" and you will see products available. However, your state or provincial regulations may put restrictions on your ordering and certainly the use of the product, depending upon its class, may require a technician to employ it.

Hmm.. I found this device which looks quite interesting as it claims that it isn't pyrotechnic.
http://www.pcsefxs.com/spark_generator.htm

Most of these effects can be done on set in a practical manner
called special effects or pyro (fire, flame, sparks etc.) effects
and can be done with water (rain for example), fire, dirt etc. etc.

However a lot of effects including total submerging for example
are done with computers these days. They are generally done
through particle effects and carefull rendering / compositing.

One such scenes was the scene in Hellboy where Abe Sapien
goes underwater to find eggs and Sammael. It was completely
shot without water which was added later.

A lot of times the effects are combined as well where live elements
on set will interact with CGI (Computer Generated Imagery) on
the computer and such. The last being the safest and cheapest
thing we can do/try ourselves including muzzle flashes and other
gun effects like bullet holes etc.

Thanks guys. Great link Keith. Now I know where to rent stuff if I need it. (Or find technicians)

Rob- It seems like most water scenes are CGI now. LOTR did it this way when Sam is underwater after chasing Frodo (end of movie one). Sean Astin was merely on a blue screen with wind blowing. They added the bubbles, etc. in post. I'm sure actors prefer this--I'd hate to have to try to act underwater....