Have you considered having a program that users could run to generate the map textures ahead of time? Something similar to TES4LODGen that you could run everytime you add/remove a mod that alters cells? I imagine it would be fairly difficult to create the program, but then you could get around needing the water hacks and the small performance hit of creating the map textures in-game. Although, I guess it would probably be an awful lot of files created/disk space used. Just an idea, I really like the mod.
Edit: In the mod description, it says the map textures will be in textures\Maps\, and I see them, but why are there subdirectories in there too? I have folders for All Natural - Real Lights, Oblivion, Oscuro's_Oblivion_Overhaul, and Unofficial Oblivion Patch. Are those supposed to be there?
The only way to generate the textures in ingame when you are in the cells. The closest thing to pre-generating would be to upload prepacked BSA files with textures for the more generic areas. Only if the user has mods which alter the cells which have been pre-generated then they may no longer match. Think for example about UL mods, if you were to pre-generate the textures for those areas without them loaded, the user won't see all the goodies on his MiniMap. Ofcourse it's still possible to pre-generate areas that are less likely to be affected by mods or make special BSAs, for example, for all the UL areas. An alternative is something that I already coded in (but is outdated) is a way to systematically generate textures ingame. Where you would turn the script on and then the script will automatically move you from area to area and generate textures for it. So you could turn it on, go do something else for like 10 minutes and come back to have lots of textures generated. Only downside was that I use Pluggy to read the list of cells.
As for the extra folders, yea they're supposed to be in there. Probably worth mentioning in the readme. The general rule is that whichever mod makes the last changes to a cell (e.g. the furthest down in your loadorder) will be the subfolder which holds the textures. There are a few exceptions but most of the time it follows this scheme.
shadeMe: Is it a large seam? Or only a small blinking seam? Awell, I'll wait for a screenshot.