Kelvin-Helmholtz (KH) instability is the instability caused by the differences of density and velocity across the two fluids, which can be observed in nature in various scales. Using Flowsquare, this type of flows can be simulated by choosing cmode=3 to take account the density difference of the two fluids and/or relatively large velocity. The boundary file (bc.bmp) is just a blank bmp, and ic.bmp is used to specify the initial field. Also, to initiate the instability, a velocity perturbation is added to the initial velocity field. The below youtube video is what you can simulate with the following input files.
The top and bottom boundaries are simply outflow boundaries, and the simulation clearly shows the effect of these boundary treatments. If you could afford a better computational resource (money and/or time), it would be better to simulate with large ly and ny (~1024 pixels?).
Boundary Condition: bc.bmp
Initial Condition: ic.bmp