Another vote for default Minecraft textures!
Our lighting is still very much in-progress. We will have all sorts of those newfangled whiz-bangs that they have in Diablo 3 and whatnot. Thankfully adding some of these rendering processes is actually quite simple, as they're solved and documented problems, or we wouldn't put too much effort into it.
Just for the sake of context, over the last week I can think of probably 5 or 6 different game design "conversations" that we had which were extremely productive. Other than the Water Debate (which is a gameplay discussion), I don't think we've really discussed rendering since December. Our priorities are definitely gameplay first.
For the record, at this point we're leaning toward not having physics-controlled dynamic water sources, largely for technical reasons. I'm really sad about this decision, but I agree with it. I love messing around with physics systems, but it's a big enough headache that we had to ask ourselves what the game was about, and it's not about fluids, it's about stories and characters. Those two points would suffer if we started allocating a large amount of network bandwidth to fluid simulation (not to mention the programming time given that we're still running this project on a surprisingly small team).
In a perfect world, if everyone had awesome cable connections (and if we had a bit more dev budget), I think we'd do fluids, but we're not 2d, and in 3d this is a very hard problem.