Just a brief note on magic and some of it's effects in water. As per the DMG, Fire spells may be cast underwater with a successful Spellcraft check DC 20 + spell level, this normally results in fantastic billowing clouds of super-heated steam. Cool.
ACID area effects/spells (note ranged attack spells such as melf's acid arrow are not effected by this) have half damage initially due to the mixing (and subsequent neutralization)effect with the water but have a lingering acidic effect equal to the other half of the damage that will continue to do damage within the area of effect. For example, a 6th level Wizard casts Mestil's Acid Breath (MGoF). Normal damage is 6d6 so initial damage would be 3d6, the following round would deal 2d6 damage and the round after that a final 1d6 damage. A 9th level Wizard would deal 9d6 normally but underwater the first round deals 4d6 acid damage followed by 3d6 the second and 2d6 the third.
COLD effects/spells are unaffected underwater but will often produce the unfortunate side-effect of creating blocks of ice. Blocks of ice due to buoyancy float to the surface in time, though not too quickly. A successful or failed save finds anything within the area of effect pushed to the closest edge. On a botched reflex save the target is encased in the block of ice and suffer from the suffocation rules as normal (i.e. can hold their breath up to twice their con before fortitude checks for suffocation begin, and no, water breathing does not work with ice even if it is just frozen water :b ). In order to free an encased subject, double the damage of the original cold effect must be done. Fire damage omust meet the cold effect damage in order to free an encased subject and Sonic damage need only do half as much damage in order to free the subject. Note that an encased subject freed in this manner takes half the fire or sonic damage inflicted.
THUNDER effects/spells deal damage as normal but the area of such effects are increasd by 50% and the DC's of sonic attacks are increased by 2.
ELECTRICITY effects/spells change dramatically when dealing with water. Regardless of the intended shape of the attack, all electricity attacks delivered into the water become emanations centered at the point of origin or point of contact with the surface. The size of the emanation is 5-ft per damage die the attack would normally deliver. For example a 5d6 lightning bolt would emanate 25ft while a 3d6 shocking grasp would emanate 15ft from the casters hands (ouch). The damage of the attacks is normal for the 5ft center but is lowered by one die per 5ft away from the center of the emanation. The 5d6 lightning bolt for example would deal 4d6 10ft away and 2d6 20ft away. If the area of the water is not sufficiently large to allow the electricity to fully emanate, any remaining dice are maximized as per the Maximize Spell feat. Our lovely 5d6 lightning bolt example again if centered in a pool of water 20ft in diameter would only be able to emanate 10ft. In the center 5ft square only 2d6 + 18 points of damage (3-dice X 6 = 18 ) and 10ft away would apply 1d6 + 18 points of damage.