Displacement Paint

Is there any sort of displacement paint in blender?

Look in the Scripts menue under Mesh/Dispaint.
It uses vertex paint values to displace the mesh.
http://jmsoler.free.fr/didacticiel/blender/tutor/cpl_displacementpainting_en.htm

There is also the B-Brush script.
http://mediawiki.blender.org/index.php/Release_Notes/Notes241/Python_Tools

Or you can download a cvs build with the Sculpt Mode function.
Article:
http://www.blendernation.com/2006/05/24/google-summer-of-code-results-announced/

Test Build:
http://blender.org/forum/viewtopic.php?t=9139&start=0&postdays=0&postorder=asc&highlight

Update:
http://www.blender3d.org/forum/viewtopic.php?t=9779&sid=6800dc9fdd29964e6c7d3c9897742edd