Warhawk's water is more technically impressive. Warhawk is technically superior in every way--lighting, shadowing, reflection, depth, 3D structure and animation, haze, etc. It still is lacking some important aspects of water, most notably any significant action against the shoreline. That is really really rough water around that island and it should be splashing against the cliff walls. Having lived almost my entire life near oceans and sounds that is one of the "holy grails" that will be very hard for hardware in 2010, let alone 2005. Basically the same complaint I had for Kameo (no real "splash") I have for Warhawk.
From an art perspective I like the exaggerated waves. Yeah, I have flown over the ocean a lot (used to do it for a living) and you wont be seeing waves from up in the air (and if they were visible like they they would be recking havok on the shore). I think the water does its job and then some. It is an awesome backdrop for the battle and looks REALLY good. The color and light reflection are what stand out most to me. The water is probably too solid up close and possibly not dark enough in certain areas, but artistically it is a masterpiece.
While not as technically advanced, the Midway shot with the carrier is very good for the technical limitations. If there was some wash around the ship on the below pic I would have to say, artistically, they capture the essense of a carrier at sea--despite any technical limitations.
http://media.teamxbox.com/games/ss/1228/1119563860.jpg
Obviously Midway is out of its league in terms of lighting, modeling, shadowing, reflections, and color palette. Their presentation of the open ocean seems more artistically intune with reality, so in that sense it looks "good".
So technically Warhawk hands down. Artistically I like Warhawk better, but I can see why someone would think Midway looks better (from certain shots... I think overall both games in motion there would be no comparison because Midway's technical limitations offer too many points of "breaking" the mood). If we were to put both on a technical even bar (either lower Warhawk to WaveRace levels or up the quality of Midway) I think we run into the same debate we have had for the last week. Art and Content.
As it is content can be such a huge factor on what looks "good" that a technically poor title can look really good if the art direction and content works well within those limitations.
Midway is a good example of how technical limitations can be overcome, to a degree, with good art direction to produce a very impressive end result. Not as technically advanced as Warhawk, but for its goal it does a good job (limitations and all). Warhawks water works better fot its game, and I think overall could be deemed "better" (although if it were slapped on Midway the exaggerated waves with no wash would be out of place and stick out in a negative way... so I am not convinced it would look good in Midway).
Ps- As for "best water ever" hmmm
Far Cry PC with its nice living shoreline,
Half-Life 2,
BF 2 overall design, etc... all have excellent water. Although none are as technical, within their art direction I think they all have merits for "best" game water. Very hard to compare the screen shots to a video, but FarCry, for example, looks absolutely stunning while playing. And FarCry/HL2 will be about 2 years "old" when Warhawk hits the states. So that is pretty impressive.
I do also remember too well the waterwars this gen (Bloodwake vs. Slpashdown vs. Wave Race)