I ran into this bug in a big way yesterday while engaging a large convoy. I didn't see any polygons, but I did have a layer of fog about 100 feet off the water. In a nutshell, I reached a point where any external view would basically slam the game down to 1 FPS (game is normally 60+ FPS) and eventually cause the video to fail (according to Vista's error reporting).
I reloaded my save from just before this incident and turned EE off, butter smooth throughout. Having EE off DEFINITELY solved any stutters and the above problem for me. I don't think it's the water doing it; I think it's the volumetric fog that's the root of the problem.
Specs:
Everything is maxed out in the graphics options, running at 1900x1200.
Dell M1710
Core2Duo T7200 2.0GHZ
2gb RAM
Vista 32-bit
GeForce Go 7950 GTX 512mb w/driver 7.15.11.141 (3/2/2007 Vista driver)
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