Options overlays problem

I’m trying to fix a water problem that has started for no reason (no reflections, completely lifeless and brown), but when I open more then one window from options > video, they aren’t layered properly. I have to select video THROUGH the main options window that has just become slightly transparent.#
Even if I select ‘Reflect All’ > OK > Apply, it resets back to Simple Reflections.
Can anyone help?

Post screenshots
PC Specs

The point was, everything was fine on High.

Specs:
2.2Ghz AMD Quadcore
2Gb RAM
Nvidea GeForce 8400

Do you need a screenshot of the options windows? Tey’re just out of order, so you need to drag the first one you opened (Options) in order to view Video. You cans elect the options, but it gets a bit confusing.

Here’s the water:

http://img399.imageshack.us/img399/7428/gmconstruct0000.jpg

Have you got the latest video drivers?

That’s a good question. I seem to have both 175.19 and 181.22. I’m assuming 181 is the most recent, or does it not matter that both folder are there?

[editline]12:21AM[/editline]

New development: Episode 2 water comes out white. Solid and with no ripple effects unless it is hit with weapons, props etc.