Blender water problem: dark shadow, blocky apperance

http://schtals.files.wordpress.com/2012/04/screen-shot-2012-04-22-at-6-10-10-pm.png

Just started to learn water. Releasing FLUID onto a OBSTICLE within a DOMAIN.

Im getting 3 problems you can note in this picture:

  1. Bloky and “thick” water. I’d like to see it more realistic
  2. OBSTICLE does not seem to stop water. Some of the water is going thru the obsticle. (why?) Could it be due to low poly water? Maybe I need do incease the size of everything?
  3. That nasy drop shadow. Where is that coming from. It’s showing up dark and unnatural even my liquid is semi transparent.