well the "jello effect" on the water is a well know issue and has been talked about a lot.
try searching the sh4 mods forum also for "funny water" and "water distortion" and you will understand more about it.
instead of just looking around the forums try the search tool at the top of the subsim page, i found 10 posts searching for "jello effect" but there are others too.
search results here:
http://www.subsim.com/radioroom/sear...earchid=376063