Each color change is step in depth.
So 255,255,255 is land while 254,254,254 is the first step below sea level.
Now that said the deeper you go the more it obscures the water texture (the water become less opaque). At some point basically it will deep enough that you won't see the water texture at all through the water. I know this point is before 0,0,0 but I forget actually at what depth (color) it completely fades out.