Adding links for wave foam and haze mist effects for the Lava:
UDK Foam: http://forums.epicgames.com/threads/763051-UDK-Ocean
Post processing material effects: http://udn.epicgames.com/Three/PostProcessMaterials.html
Heat effects using Post processing: http://forums.epicgames.com/threads/910150-Heat-Distortion-Effect-Landscape
Heat effect kismet: http://www.youtube.com/watch?v=Z0W-WwJpTSM
LAVA (just a case of making a good looking lava texture): http://forums.epicgames.com/threads/751575-Need-help-on-how-to-create-lava!
Good looking lava: http://forums.somethingawful.com/showthread.php?threadid=3331710&userid=0&perpage=40&pagenumber=3#post381891468
Just a bunch of links right now will upload some results later.