Here is a fully manual way to do it with no plugins or other tools, and can also be done pre-CS3:
Create a 1,500×1,500 pixel comp and call it “ripple” or something like that. within this, create two layers – a black solid that fills the background, and a white solid above it. On the white solid, use the circle mask tool to create a large disk about half the size of the comp. Duplicate the mask, set it to “subtract” mode in the mask settings, and lower the mask expansion to like -60 pixels (adjust to taste). You will end up with a big thick ring. Apply Fast Blur to this “ring” layer, with settings of like 20 or more (adjust to taste). Animate the layer’s scale from 0 to like 300% or something. I would also animate the opacity to fade in at the very beginning of the scale animation so that the ring appears as it scales up.
At this point you have a big, blurred ring that scales up. Pull this “ripple” comp into the comp that holds your footage and hide the ripple layer. Apply “effect>distort>displacement map” to your source footage, and set the ripple comp as the source layer in the displacement settings. You will also need to set the “Use for horizontal/vertical displacement” settings to luminance since we created a black and white animation as the basis for the ripple. You will need to experiment with the Max Displacement settings to get the look you want, and you will also need to go into your ripple comp and adjust things to suit the look you are after.
Seem complicated? There’s probably easier ways but this will give you a lot of control over every aspect of the animation, and you’ll understand how it works. The other, more “feature film” method of doing this is using particle systems to create discs of particles blowing outward, with half of the particles being green and the other half being red. once slightly blurred, this can give you a more gassy, heat-wave style displacement. I would assume it’s also why the displacement map effect defaults to using the red and green channels as the source channels for the displacement.
Brendan Coots
Splitvision Digital
http://www.splitvisiondigital.com