CGSociety has a great writeup of the VFX of “The Imaginarium of Dr. Parnassus” including discussions with Peerless Camera Company’s Paul Docherty.

Every practical effect was heavily augmented with CG, particle systems, Houdini fluid motion, etc, using the miniature work as a core, “partially because we wanted the look, and because to do some of that stuff digitally just cost too much. To build the temple digitally would have probably bankrupted us in one sequence. Also, Terry has a huge miniature experience and understands them inside and out. The trick for us was putting it together with all the digital bits.”

via CGSociety – The Imaginarium of Dr. Parnassus.