I apologize if this is old news...just wanted to post it here in case it might help anyone out.

I've had two annoying graphical issues running Skyrim with my Radeon 5870. Here are the issues and solutions for anyone else seeing these problems.

• Since the release version of Skyrim I had problems with some textures on walls and floors appear and disappear depending on my distance from the surface and/or the angle at which I was viewing the surface. The solution to this for me was to disable Adaptive AA for my video driver in the Catalyst Control Center.
  
• Since the 1.5 update to Skyrim I've had a problem with ugly box artifacts on water and inside particle effects like smoke. http://www.youtube.com/watch?v=ZS46rorWUR4. Some people suggest going back to the 12.1 Catalyst drivers, but there's an easier workaround. Disabling Anti-Aliasing in my Skyrim settings, then setting up a profile for TES4.exe in Catalyst Control Center that forces Anti-Aliasing to be on regardless of the application settings fixed this issue for me. This was supposed to be fixed in the 12.3 Catalyst drivers, but apparently it's not.

Seems like Skyrim and AA in ATI's drivers don't play nice together at the moment.

Again, I apologize if this is old news. I did a quick search and didn't find a thread about it, so hopefully this will help someone else seeing these problems.