What I expected to happen was...:
Textures to be displayed like normal

What actually happened was...:
All the terrain textures turn black and water looks grey. Things like monsters, players, chests are still visible. (see screenshot blackterrain.png).
If I use the 32 bit java executable instead of the default 64 bit the terrain turns transparent instead (see transparentterrain.png).

Steps to Reproduce:
Could not find a specific step to reproduce, but after 1-10 minutes of normal play this issue always happens.

My version of minecraft is a fresh install of the 1.7 prerelease and this issue does not occur in minecraft 1.6.7. No resource packs or addons are installed.
If I reload the default resource pack the black textures are temporarily fixed, however the transparent terrain can not be fixed even after a restart of java/minecraft. Only a system restart temporarily fixes this problem.