I'm wondering how I would go about creating a 2D water shader that is seen in this video http://www.youtube.com/watch?v=phChFfi4GOs
The water effect that limbo uses is pretty awesome. I'm not so much concerned about the waves, other articles cover that, but how can I get the..diffraction, I believe it's called, and various blurriness and how the object looks like it's moving even though it isn't (like real water).
GLSL is my target language.
But I don't have any idea on how to do the blur-like below-surface water movement effect. Any ideas?