Highly detailed HST observations of globular-cluster cores and galactic nuclei motivate new theoretical studies of the violent dynamical processes which govern the evolution of these very dense stellar systems. These processes include close stellar encounters and direct physical collisions between stars. Such hydrodynamic stellar interactions are thought to explain the large populations of blue stragglers, millisecond pulsars, X-ray binaries, and other peculiar sources observed in globular clusters. Three-dimensional hydrodynamics techniques now make it possible to perform realistic numerical simulations of these interactions. The results, when combined with those of N-body simulations of stellar dynamics, should provide for the first time a realistic description of dense star clusters. Here I review briefly current theoretical work on hydrodynamic stellar interactions, emphasizing its relevance to recent observations.