Dynamic water was disabled in the game. So you cannot see it anymore. This happened over 6 months ago.
Other things you can do to make the game look better is downloading the 1024 high resolution texture skin pack for the game.
http://downloads1.hitechcreations.com/AHHIRES211.EXE You'll need to change the video options in the Main Startup clipboard in Aces High (as in before you get to the tower and launch the game in online or offline mode).
Anti-aliasing can only be turned on via the Nvidia Control Panel. There is no option to turn it on in Aces High.
The game has no graphically really changed much in the last 3-4 years other than the redone textures and skins. And since the game uses Directx 9 (I think? Maybe even Directx 8), you cannot force it to look pretty like Directx 10 games with your new 8800GT card. So pretty much, your new card will let you run the game at higher resolutions with AA turned on and high res texture packs with a good frame. Other than this, the game will graphically look the same.