Liquid explosives have been around for a long time. But these explosives share two bad traits. They are either very unstable (like nitroglycerin), or subject to deterioration as the different elements suspended in the liquid settle, and become less explosive. Overall, liquid explosives aren't very explosive compared to more solid one. Another problem with liquid explosives is that their components are usually noxious, if not poisonous. Nitric Acid, for example, is nasty stuff, but can be added to more benign substances to produce fairly stable explosives, like Nitromethane.
In 1995, an al Qaeda bomb maker used nitroglycerine (in a contact lens solution bottle) to fashion a bomb that blew a hole in the side of a Boeing 747, but did not destroy the aircraft. Nitroglycerine is one of the more powerful explosives, but subject to going off spontaneously if jarred. Very dangerous to carry around.
Another favorite liquid explosive is one using various types of nitrates. Fertilizer can be mixed with diesel oil to form an explosive slurry. Not something that would pass a smell test at airport screening. But some nitrates, like Methyl nitrate, are more explosive, and only need exposure to another chemical to detonate.
Chemicals found in household products, especially those used for cleaning, are popular for home-made explosives. For example, mixing hydrogen peroxide with nail-polish remover or paint thinner produces an explosive mixture that can be set off. You need more than a few ounces (as with nitroglycerine). In fact, a quart or more is needed to assure fatal damage to a large aircraft. These are not particularly powerful explosives, and have not been widely used for terrorist attacks. There are also doubts whether such explosives could actually do enough damage to penetrate the hull of an aircraft, and create a situation that would cause the airliner to crash. Keeping dangerous liquids off of airliners is not easy, for the containers can be strapped to the bodies of the suicide bombers, along with the detonator (which can also be a liquid).
The key thing with all of these possible liquid explosives is that you need someone, who knows what they are doing, to mix up a batch that will work. The big thing to come out of the August 10th incident will probably be the capture, or identification, of a guy terrorists like to call, "the engineer." These fellows usually have a degree in something like chemistry, and maybe some work experience in the chemical industry. Terrorist movements don't attract a lot of people like this, and the Israelis figured out that if you went after "the engineers" you could cripple a terrorist movement. This was what the Israelis did two years ago to halt the Palestinian suicide bombing campaign against them.
The most dangerous terrorist group to ever exist was Aum Shinrikyo, a 1990s Japanese cult that was able to recruit well qualified engineers and scientists. These people proceeded to achieve the Holy Grail of modern terrorism, producing their own nerve gas. So far, Islamic terrorists have not attracted the caliber of people Aum Shinrikyo (radical Buddhists) was able to recruit. But the potential is there. With Aum Shinrikyo grade techies, Islamic terrorist groups could produce all manner of liquid horrors, including explosives and various chemical weapons.
Liquid explosives are back in the news, after British counter-terrorism forces arrested 21 local Moslems on August 10th, for participation in a plot to smuggle liquid explosives onto airliners and set them off once aloft. This has long been feared as a possible terrorist tactic. The recent scare came about because there appeared to be a large terrorist organization supplying the explosives, detonators, and suicide bombers.