Well I am using 2 layers really.

The first is the caustic lighting effect animation consisting of 36 frames with some coloring thrown in.

The second is a 1:1 scale seamless texture that I found, scalled down to the 80x80 size required, added a bit of an alpha mask and put it all together in-game.

The caustic lighting cycles through it's animation and on top I draw the water surface texture with an alpha value that goes up and down just slightly as to give it a nice animated effect.

I'll see about posting a video of it sometime soon.

The real fun stuff is what I've been up to lately. Graphics is nice an all, but I've finally been adding 2 things I've been dying to do for a while now; Message Scrolls and Hidden Objects inside of Objects. Hint: Magic gets them out.

I think that this will give a lot more to the gameplay and allow me to tell a bit more of the story as you play through it.