Up until like 1.2 I used a pack that was half Nick's HD pack and half textures I had found through Google. My lava in particular was wicked-looking. I had pretty nice-looking water, too, but I wouldn't be able to remember off-hand where I found it. I 'm pretty sure I just Googled "water tile 256x256" and added a bunch of transparency in Photoshop.
When you use a texture pack you don't have to change the liquid textures/animations. Although, that said, I use the Gerudoku pack and I think the water looks nice in that. --- "Even mouth breathing scrubs who need to be told that standing in fire is bad have feelings. Just not in their burning feet, apparently."-squirrelnest