I downloaded the 2 Far cry demos to try out on my GF7900GT, and the water looked like this even after changing water quallity settings.
They look like artifacts to me, and even after restoring my video card to stock speeds i still get them. I was using Forceware 84.21 in the screenshots, im using 85.98 now and still having the same water. And its the same on both demos. I never got such textures when i had my FX5700 Ultra or 6800LE with the demo. And this only happens on Far Cry while other games run fine, i also plan to get the game soon (Yeah 2 years after its released :D) is it possible the demo has some competitblity issues with the GeForce 7 series? Is this fixed in the 1.3 patch?
Try using an even newer driver, they are up to about 91.47 now and a lot of minor fixes for 7 series have been released over the past 6 months or more. I see what you mean about artefacts, its wierd isnt it.
I have a 6800GT, and using the beta driver, I have no problem with textures or anything in far Cry...