I've since I purchased and installed the game had this extremely annoying bug where the game starts flickering when I'm near water. Or just out in the open world.
The flicker is like if I was going to the surface and then diving like 10 times in a second, and sometimes when it happens my character actually starts swimming for a short amount of time. Even though I'm walking/running around on dry grounds.

Yesterday I wanted to tape the problem and upload it to YouTube to get some help, but when I did that Fraps locked the framerate to 30 and then there were no flickers at all!

I have a 120hz monitor (BenQ XL2410T) and 2x eVGA GTX580 (with latest WHQL driver and sli enabled). The game is running on ultra with high textures mod and stable on 120fps.
I've tried the FPS Limiter mod, but it crashes the game when loading it.

My Skyrim is of course legit and purchased through Steam hense fully updated (1.4 somthing). I've tried re-installing and running without any mods. I've also tried disabling vSync. None of these methods worked.

Anyone who can help?

Try set your game to 60fps and it should be allright..
Skyrim was not made for a higher fps than 60, by removing this limit, can cause extreme issues with the game.

The game can only update 60 times per sec, if you force it to do it twice as much, you will see flickers.

And how do I set the game to 60fps then?...

Turn on Vsync Silly

vsync doesn't work if the frequency of the monitor is 120hz and the video card is able to obtain 120fps....

The only real solution i'm aware of right now would be to go into your adapter control panel and manually set 60hz mode then play....

85hz or 85fps is the max you can go without having troubles with the game engine. create a custom resolution with 80hz (save 5 fps for extra safety) in the nvcp and use the ingame vsync (bpresentinterval=1, if I remember it correctly) with triple buffering on from the nvcp and you'll be good -)

You can also use one of the frame limiters out there (Nvidia Inspector, DXtory etc) to limit FPS to 60-80 while maintaining the benefits of 120Hz refresh rate. I don't know if this will fix this water problem for you though, as I've read this is a common issue with SLI/CF. Most likely caused by an intermediate buffer not being rendered or updated on one card or the other so you get that constant flickering back and forth. I don't run into the issue because I usually run 3D, which is more akin to both GPUs rendering offset versions of the same frame.

You know, there's a reason why I said I had a 120hz monitor. vSync will syncronize every frame, and when I have a 120hz monitor it will still be 120fps....
Who's silly now?

I have vsync on and a 60 Hz monitor and I sometimes get very flickery water.

You..
because your monitor forces the game to update frames double the speed its suppose to do..
set your monitor to something lower, or, download a fpslimiter from various sites, torrentsites got these im sure

Use nvidia inspector, it has a built in frame limiter, use that.

Thank you, sir. I'll try that!

Edit:
Can't see any options to adjust the fps that application.

http://i39.tinypic.com/2cdvmgz.jpg

Ah, sorry i must have missed the 120hz refresh rate while reading, since I think the 60hz is the most default of options. In any case, the above solution should help you limiting the fps, it's definately to that. I'm surprised you didn't get other anomalies that were reported before (such as objects flying around). Again, my mistake

Eyesight is overrated.

Many issues such as flickering water can be "fixed" by saving and reloading the game from the main menu. Other instances of flickering, specifically those that are z-fighting problems, can not be fixed. Flickering mountain textures are an example of this. In general, when a texture is not rendered properly when close to you, you can likely fix it by reloading from the main menu.

As to the 60-120Hz debate, gamebryo engine based games have a well-documented 64Hz bug, which is why many people limit their framerate to 59 or 60. This remains true even now with the widespread availability of 120Hz monitors. There is no reason to require more than 60 frames per second in this game, even if the engine supported it.

I really doubt the issue is 120Hz. I also have 120Hz monitor (Asus VG236H) and I have no flickering issues with water. I only have 1 GTX 580, though (and 3.7GHz Core-i7 920), so I do not get the full 120 FPS all the time, but when I do, I do not see any screen artifacts. I typically get around 80-100 FPS while running around outside. By the way, there is a big difference between 60FPS and 100 FPS for example so I definitely would not want to limit my game to 60 FPS artificially.

I would much more suspect it is because of SLI. GTA-IV for example has all kinds of flickering issues in SLI mode.

I would do a quick test and disable SLI and see if that would make a difference. Of course it is not a solution, but at least it would hopefully lead to an ultimate solution with possibly a new driver in the future.