In the present work, we investigate mathematical and numerical aspects of interior penalty finite element methods for free surface flows. We consider the incompressible Navier-Stokes equations with variable density and viscosity, combined with a front capturing model using the level set method. We formulate interior penalty finite element methods for both the Navier-Stokes equations and the level set advection equation. For the two-fluid Stokes equations, we propose and analyze an unfitted finite element scheme with interior penalty. Optimal a priori error estimates for the velocity and the pressure are proved in the energy norm. A preconditioning strategy with adaptive reuse of incomplete factorizations as preconditioners for Krylov subspace methods is introduced and applied for solving the linear systems. Different and complementary solutions for reducing the matrix assembly time and the memory consumption are proposed and tested, each of which is applicable in general in the context of either multiphase flow or interior penalty stabilization. As level set reinitialization method, we apply a combination of the interface local projection and a fast marching scheme. We provide for the latter a reformulation of the distance computation algorithm on unstructured simplicial meshes in any spatial dimension, allowing for both an efficient implementation and geometric insight. We present and discuss numerical solutions of reference problems for the one-fluid Navier-Stokes equations and for the level set advection problem. Solutions of benchmark problems in two and three dimensions involving one or two fluids are then approximated, and the results are compared to literature values. Finally, we describe software design techniques and abstractions for the efficient and general implementation of the applied methods.