Near the end, when Bud is adjusting to the breathing liquid, the man next to him says, "Your body breathes liquid for 9 months". The liquid in a womb is not where a person recieves their oxygen, they get it from an umbilical cord.
The oxygen is transferred through the umbilical cord, but what was being referred to was the fact that an unborn baby's lungs are filled with fluid and NOT air.
F.Y.I. A babys lungs are not filled with liquid at all, while it is true that a baby recieves oxygen and nutrients from the umbilical cord the babys mouth remains shut until it is born.
the lungs of babies do contain liquid, they do open their mouths (swallowing amniotic fluid that is excreted as meconium) and they are unable to close their nasal cavities.
This liquid is not 'breathed' but keeps the lungs inflated (premature babies are unable to produce surfactant, a substance that prevents the lungs from collapsing)
the fluid does exist and a real mouse was used in the film. LiquiVent and Perflubron are commercial examples. the technique dissolves oxygen and carbon in liquid fluorocarbons
see: http://en.wikipedia.org/wiki/Liquid_breathing
and: http://www.gla.ac.uk/departments/surgicalpaediatrics/liquid.htm
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