I have a 5770 and I run water=0 also. You will only see white caps and such in bad weather, like blind or thunderstorms(maybe others but not sure). Have you tried testing it with blind weather condition?
I just prefer water=0 because I don't have time to admire "pretty" water while in combat. It is also a hit on fps and I want all the fps I can get when in heavy action. It is very simply "personal preference".
If I am going to make a track to get some pretty pictures, then I will switch to water=2, otherwise I use water=0 for best fps and still good looking water.
I agree with Flanker about effects=2. I challenge you to see a difference "in combat" from effects 0 to effects 2. Plus, 2 has been known to cause problems in certain situations.
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