Shader effects on water surfaces become astounding with DirectX 8. One of the earliest graphics cards to attempt to make use of them were the Geforce 4 and Radeon 9600 in the game Morrowind. For the first time, the water realistically reflected the 3D landscapes in the waves. Even better, the effects on the water were there to admire throughout the entire game. Running or swimming through water even created displacement, causing waves on the reflective surface.
This is a fantastic article, especially if you want to catch up on your graphic lingo. They have many side-by-side comparison images so you can see the difference between certain effects. Check it out at Toms.