I am using Vue 7 I and  am having some weird water issues. To just try it out I created a very simple scene. I did not bring up the water editor. I used a preset Channel water. I tried this numerous times both using Vue 7 channel water and channel water from the vue 6 library. The water looked weird. I, then, created the scene in Vue 6 I and rendered it quickly. It looked as it always did. When I brought it into Vue 7, it looked almost the same. The water colors were slightly different, but the transparency level was the same. I checked the tranparency properties for the channel water in both 6 and 7 and they were set at 90% in both. But the water didn't look anything like channel water when created it as a new scene in Vue 7.

Also, if you look at the material editor, you will see two materials when I created it in Vue 7. I clicked on the default as always to change materials and it didn't change. When I deleted the default I got a blob image. I believe last night I, also, tried this with other waters that had their counterparts in Vue 6 and got the same result.

I'm using XP-64 with 4 gig of memory.

I just tried - Channel water looks normal for me.  Tried a few different water material types and they all seemed OK too.  Maybe a corrupt file?   

I'm not home right now and can't check your exact settings, but I already played several hours with V7, including some with water, and didn't have any problem.

I have a question: what did you apply the water material to? Was it to an infinite water plane? Because, if it was, as far as I remember this has two layers, one for foam (on the top) and one for water itself. The first time I played with this I got a bit confused because I didn't realize that right away. The infinite water plane in V7 seems to be different from V6's, probably because of the water editor thing. Probably, there are more differences than just the two layers.

Maybe you could try repeating your tests using a cube, for example, and see if that strange behaviour you mentioned still stands.

By the way, in Vue6, I think I never used the infinite water plane. I always used a big cube stretched to the far horizon. I found that this behaves much better for a good balance between transparency and reflections. If you look at my recent water images, you'll see what I mean. Some of those effects I couldn't achieve with an infinite water plane.

So, my recommendation is: unless you want to use the new features from the water editor (foam, waves, etc), I recommend that you use a really big cube and not the infinite water plane. For example, if you want a nice calm lake, a cube is much better, IMO. It's also probably faster to render (although I haven't made any concrete tests yet).

I applied it to an infinite water plane thinking that if I used the presets similar to Vue 6, even if they were in Vue 7, I would have the same results. I did apply it to a cube and to a squashed regular terrain and it was fine. I thought the difference would only apply to the new water presets.

Thanks a lot. The problem is now solved.

Rutra -
I was just testing this out. I, also, rarely used a straight water plane in Vue 6. I usually  used a "squashed" terrain. I will try the cube, also. Thanks for the idea.

A cube renders faster than a terrain and if you have still water and a good bump, the difference should be negligible. However, if you can spare the render time, a terrain should have a better result than a cube. 
That's a constant struggle in Vue - the right balance between render time and image quality. :-)

One addition to my previous post:

A terrain should have a better result than a cube... if you have the terrain covering all the way from the water surface to the river bed or sea bed. If you squashed the terrain in a way that it basically becomes a plane, then it might not be the case. In my tests with transparency and reflection, the best results are obtained when the water object is a real 3D object, physically extending from surface to sea/river bed. Of course, this is not relevant if you don't want any significant transparency, like above a deep ocean or something. In this situation, a plane (or an highly squashed terrain) is good enough.

Rutra -Thanks for all your information. I appreciate it.