Quote Originally Posted by Sly
Personally, I would avoid using a very large texture with alpha. That's an expensive texture if it is 32-bit, and depending on the size of the water, the texture resolution may need to be quite high as well.
What if you use multi-texturing and use the second texture in 8-bit alpha format?

Quote Originally Posted by Sly
I would use a smaller texture to represent the water surface without alpha, and set the translucency using the vertex colours of the water grid.
Talking about optimization, wouldn't this require more heavy vertex format that include vertex colors and the additional blending options? Looks like more bandwidth and more per-pixel processing, although I agree that multi-texturing might not be that cheap anyway...