I've also Vista,try to change your Terrain data from "TRUE" to "FALSE" as below:
[NormalTextureMaterial]
DepthBufferCheck=TRUE --------> FALSE
DepthBufferWrite=TRUE
RenderedInOrder=TRUE
AlphaTestEnabled=FALSE
CullMode=CLOCKWISE
LightEnabled=TRUE
SpecularEnabled=FALSE
EmissiveEnabled=FALSE
FogEnabled=TRUE
AmbientColor=1.000000,1.000000,1.000000,1.000000
DiffuseColor=1.000000,1.000000,1.000000,1.0000000
ZBufferOffset=0.000000
BlendOp=ONE
NumTextureStages=1
TextureStage[01].TextureName=
TextureStage[01].MipMap=TRUE
TextureStage[01].FilterEnabled=TRUE
TextureStage[01].StageColorOp=TEXTURE_MODULATE_DIFFUSE
TextureStage[01].StageAlphaOp=NO_OP
[WaterTextureMaterial]
DepthBufferCheck=TRUE ---------> FALSE
DepthBufferWrite=FALSE
RenderedInOrder=TRUE
AlphaTestEnabled=TRUE
CullMode=CLOCKWISE
LightEnabled=TRUE
SpecularEnabled=TRUE
EmissiveEnabled=FALSE
FogEnabled=TRUE
AmbientColor=1.000000,1.000000,1.000000,1.000000
DiffuseColor=1.000000,1.000000,1.000000,1.000000
SpecularColor=0.500000,0.500000,0.500000,1.000000
SpecularPower=5.000000
Reflectivity=1.00000
ZBufferOffset=4.000000
BlendOp=BLEND_SRC_ALPHA
NumTextureStages=2
TextureStage[01].TextureName=
TextureStage[01].MipMap=TRUE
TextureStage[01].FilterEnabled=TRUE
TextureStage[01].StageColorOp=TEXTURE_MODULATE_DIFFUSE
TextureStage[01].StageAlphaOp=TEXTURE
TextureStage[02].TextureName=
TextureStage[02].MipMap=TRUE
TextureStage[02].FilterEnabled=TRUE
TextureStage[02].ReflectionMapping=TRUE
TextureStage[02].StageColorOp=TEXTURE_BLEND_TEXTURE_ALPHA
TextureStage[02].StageAlphaOp=DIFFUSE
The same thing you must do for WOE and WOI while with SF2 works without problems.
Greetings,
Ice Man
Teo