Here's a bug I'm seeing in Minecraft where water becomes invisible. I'm not using any texture packs or mods of any kind. The server is 1.4.7 and the client is 1.4.7 as well.

If I try placing water with a bucket within a certain area (which happens to be near the origin), nothing happens (the water leaves my bucket). If I try picking up water from exactly where I just put it down, I get the water back in the bucket. But it's not like there's actual water there and just invisible - I don't get moved by it, nor will it wipe away seeds or wheat.

If I walk like 30 blocks away and try putting down water there, it's visible.

I made a youtube video showing what I mean:
http://youtu.be/Lik8M5rjnAI

Within the area where water can't be placed, I tried digging a 2x2 hole, and tried filling in opposite corners of it with two water buckets (although each time I tried placing water, nothing visibly changed except that my bucket was now empty). Normally (including now) this causes an infinite supply of water I can grab from. When I tried grabbing water from one of the other 2 corners, it worked - the invisible water still followed the behavior that a 2x2 area can be perpetually filled.

I tried placing water above a hill where I'd planted some wheat, and could not place the water (although, again, I could pick up the invisible water from where I'd placed it on the ground). When it was down, however, I was not moved, nor was the wheat or seeds affected.

This bug was found when playing on a multiplayer server I just recently created on an ubuntu box in my home. There are no mods or texture packs in use at all - just a vanilla server. I connect via the multiplayer menu item and by entering the IP address of the local server.