I think the xbox would explode if it had to do that... But it sure is nice
You kidding? This has already basically been done for Oblivion. The OBGE guys are working on a water replacement, both water and underwater.
Here's how it looks (or looked, it's a bit old): http://www.youtube.com/watch?v=JCoSw7hGAF8
There's underwater god rays, refraction, caustics and chromatic aberration there. It doesn't really hurt the performance as far as I know and from what it looks like.
I dont like the bubbles but other than that its pretty nice.
Yeah, the bubbles are a bit of disappointment. Looks very 2D
But haha, even Crytek can make mistakes in terms of graphics eh?