diff --git a/client/shaders/nodes_shader/opengl_fragment.glsl b/client/shaders/nodes_shader/opengl_fragment.glsl
index 6dc96eb48..066e49658 100644
--- a/client/shaders/nodes_shader/opengl_fragment.glsl
+++ b/client/shaders/nodes_shader/opengl_fragment.glsl
@@ -8,6 +8,7 @@ uniform vec3 eyePosition;
 
 varying vec3 vPosition;
 varying vec3 worldPosition;
+varying float generate_heightmaps;
 
 varying vec3 eyeVec;
 varying vec3 tsEyeVec;
@@ -19,80 +20,135 @@ bool normalTexturePresent = false;
 const float e = 2.718281828459;
 const float BS = 10.0;
  
-float intensity (vec3 color){
+float intensity (vec3 color)
+{
 	return (color.r + color.g + color.b) / 3.0;
 }
 
-float get_rgb_height (vec2 uv){
+float get_rgb_height (vec2 uv)
+{
 	return intensity(texture2D(baseTexture,uv).rgb);
 }
 
-vec4 get_normal_map(vec2 uv){
+vec4 get_normal_map(vec2 uv)
+{
 	vec4 bump = texture2D(normalTexture, uv).rgba;
-	bump.xyz = normalize(bump.xyz * 2.0 -1.0);
-	bump.y = -bump.y;
+	bump.xyz = normalize(bump.xyz * 2.0 - 1.0);
 	return bump;
 }
 
+float find_intersection(vec2 dp, vec2 ds)
+{
+	const int linear_steps = 10;
+	const int binary_steps = 5;
+	const float depth_step = 1.0 / linear_steps;
+	float size = depth_step;
+	float depth = 1.0;
+	float best_depth = 1.0;
+	for (int i = 0 ; i < linear_steps - 1 ; ++i) {
+		vec4 t = texture2D(normalTexture, dp + ds * depth);
+		if (best_depth > 0.05)
+			if (depth >= t.a)
+				best_depth = depth;
+		depth -= size;
+	}
+	depth = best_depth - size;
+	for (int i = 0 ; i < binary_steps ; ++i) {
+		size *= 0.5;
+		vec4 t = texture2D(normalTexture, dp + ds * depth);
+		if (depth >= t.a) {
+			best_depth = depth;
+			depth -= 2 * size;
+		}
+		depth += size;
+	}
+	return best_depth;
+}
+
+float find_intersectionRGB(vec2 dp, vec2 ds) {
+	const float iterations = 24;
+	const float depth_step = 1.0 / iterations;
+	float depth = 1.0;
+	for (int i = 0 ; i < iterations ; i++) {
+		float h = get_rgb_height(dp + ds * depth);
+		if (h >= depth)
+			break;
+		depth -= depth_step;
+	}
+	return depth;
+}
+
 void main (void)
 {
 	vec3 color;
 	vec4 bump;
 	vec2 uv = gl_TexCoord[0].st;
 	bool use_normalmap = false;
-	
+
 #ifdef USE_NORMALMAPS
-	if (texture2D(useNormalmap,vec2(1.0,1.0)).r > 0.0){
+	if (texture2D(useNormalmap,vec2(1.0, 1.0)).r > 0.0) {
 		normalTexturePresent = true;
 	}
 #endif
 
 #ifdef ENABLE_PARALLAX_OCCLUSION
-	if (normalTexturePresent){
-		vec3 tsEye = normalize(tsEyeVec);
-		float height = PARALLAX_OCCLUSION_SCALE * texture2D(normalTexture, uv).a - PARALLAX_OCCLUSION_BIAS;
-		uv = uv + texture2D(normalTexture, uv).z * height * vec2(tsEye.x,-tsEye.y);
+	vec3 eyeRay = normalize(tsEyeVec);
+#if PARALLAX_OCCLUSION_MODE == 0
+	// Parallax occlusion with slope information
+	if (normalTexturePresent) {
+		const float scale = PARALLAX_OCCLUSION_SCALE / PARALLAX_OCCLUSION_ITERATIONS;
+		const float bias = PARALLAX_OCCLUSION_BIAS / PARALLAX_OCCLUSION_ITERATIONS;
+		for(int i = 0; i < PARALLAX_OCCLUSION_ITERATIONS; i++) {
+			vec4 normal = texture2D(normalTexture, uv.xy);
+			float h = normal.a * scale - bias;
+			uv += h * normal.z * eyeRay.xy;
+		}
+#endif
+#if PARALLAX_OCCLUSION_MODE == 1
+	// Relief mapping
+	if (normalTexturePresent) {
+		vec2 ds = eyeRay.xy * PARALLAX_OCCLUSION_SCALE;
+		float dist = find_intersection(uv, ds);
+		uv += dist * ds;
+#endif
+	} else if (generate_heightmaps > 0.0) {
+		vec2 ds = eyeRay.xy * PARALLAX_OCCLUSION_SCALE;
+		float dist = find_intersectionRGB(uv, ds);
+		uv += dist * ds;
 	}
 #endif
 
 #ifdef USE_NORMALMAPS
-	if (normalTexturePresent){
+	if (normalTexturePresent) {
 		bump = get_normal_map(uv);
 		use_normalmap = true;
 	} 
 #endif
-		
-#ifdef GENERATE_NORMALMAPS
-	if (use_normalmap == false){
-		float tl = get_rgb_height (vec2(uv.x-SAMPLE_STEP,uv.y+SAMPLE_STEP));
-		float t  = get_rgb_height (vec2(uv.x-SAMPLE_STEP,uv.y-SAMPLE_STEP));
-		float tr = get_rgb_height (vec2(uv.x+SAMPLE_STEP,uv.y+SAMPLE_STEP));
-		float r  = get_rgb_height (vec2(uv.x+SAMPLE_STEP,uv.y));
-		float br = get_rgb_height (vec2(uv.x+SAMPLE_STEP,uv.y-SAMPLE_STEP));
-		float b  = get_rgb_height (vec2(uv.x,uv.y-SAMPLE_STEP));
-		float bl = get_rgb_height (vec2(uv.x-SAMPLE_STEP,uv.y-SAMPLE_STEP));
-		float l  = get_rgb_height (vec2(uv.x-SAMPLE_STEP,uv.y));
+
+	if (GENERATE_NORMALMAPS == 1 && use_normalmap == false) {
+		float tl = get_rgb_height(vec2(uv.x - SAMPLE_STEP, uv.y + SAMPLE_STEP));
+		float t  = get_rgb_height(vec2(uv.x - SAMPLE_STEP, uv.y - SAMPLE_STEP));
+		float tr = get_rgb_height(vec2(uv.x + SAMPLE_STEP, uv.y + SAMPLE_STEP));
+		float r  = get_rgb_height(vec2(uv.x + SAMPLE_STEP, uv.y));
+		float br = get_rgb_height(vec2(uv.x + SAMPLE_STEP, uv.y - SAMPLE_STEP));
+		float b  = get_rgb_height(vec2(uv.x, uv.y - SAMPLE_STEP));
+		float bl = get_rgb_height(vec2(uv.x -SAMPLE_STEP, uv.y - SAMPLE_STEP));
+		float l  = get_rgb_height(vec2(uv.x - SAMPLE_STEP, uv.y));
 		float dX = (tr + 2.0 * r + br) - (tl + 2.0 * l + bl);
 		float dY = (bl + 2.0 * b + br) - (tl + 2.0 * t + tr);
-		bump = vec4 (normalize(vec3 (dX, -dY, NORMALMAPS_STRENGTH)),1.0);
+		bump = vec4(normalize(vec3 (-dX, -dY, NORMALMAPS_STRENGTH)), 1.0);
 		use_normalmap = true;
 	}
-#endif
 
-vec4 base = texture2D(baseTexture, uv).rgba;
-	
+	vec4 base = texture2D(baseTexture, uv).rgba;
+
 #ifdef ENABLE_BUMPMAPPING
-	if (use_normalmap){
+	if (use_normalmap) {
 		vec3 L = normalize(lightVec);
-		vec3 E = normalize(eyeVec);
-		float specular = pow(clamp(dot(reflect(L, bump.xyz), E), 0.0, 1.0),0.5); 
-		float diffuse = dot(E,bump.xyz);		
-		/* Mathematic optimization
-		* Original: color = 0.05*base.rgb + diffuse*base.rgb + 0.2*specular*base.rgb;
-		* This optimization save 2 multiplications (orig: 4 multiplications + 3 additions
-		* end: 2 multiplications + 3 additions)
-		*/
-		color = (0.05 + diffuse + 0.2 * specular) * base.rgb;
+		vec3 E = normalize(-eyeVec);
+		float specular = pow(clamp(dot(reflect(L, bump.xyz), -E), 0.0, 1.0), 1.0);
+		float diffuse = dot(E,bump.xyz);
+		color = (diffuse + 0.1 * specular) * base.rgb;
 	} else {
 		color = base.rgb;
 	}
@@ -104,7 +160,7 @@ vec4 base = texture2D(baseTexture, uv).rgba;
 	float alpha = gl_Color.a;
 	vec4 col = vec4(color.rgb, alpha);
 	col *= gl_Color;
-	if(fogDistance != 0.0){
+	if (fogDistance != 0.0) {
 		float d = max(0.0, min(vPosition.z / fogDistance * 1.5 - 0.6, 1.0));
 		alpha = mix(alpha, 0.0, d);
 	}
@@ -112,7 +168,7 @@ vec4 base = texture2D(baseTexture, uv).rgba;
 #else
 	vec4 col = vec4(color.rgb, base.a);
 	col *= gl_Color;
-	if(fogDistance != 0.0){
+	if (fogDistance != 0.0) {
 		float d = max(0.0, min(vPosition.z / fogDistance * 1.5 - 0.6, 1.0));
 		col = mix(col, skyBgColor, d);
 	}
diff --git a/client/shaders/nodes_shader/opengl_vertex.glsl b/client/shaders/nodes_shader/opengl_vertex.glsl
index 07684f616..e5644b8b2 100644
--- a/client/shaders/nodes_shader/opengl_vertex.glsl
+++ b/client/shaders/nodes_shader/opengl_vertex.glsl
@@ -14,25 +14,36 @@ varying vec3 eyeVec;
 varying vec3 lightVec;
 varying vec3 tsEyeVec;
 varying vec3 tsLightVec;
+varying float generate_heightmaps;
 
 const float e = 2.718281828459;
 const float BS = 10.0;
 
-float smoothCurve( float x ) {
-  return x * x *( 3.0 - 2.0 * x );
+float smoothCurve(float x)
+{
+	return x * x * (3.0 - 2.0 * x);
 }
-float triangleWave( float x ) {
-  return abs( fract( x + 0.5 ) * 2.0 - 1.0 );
+float triangleWave(float x)
+{
+	return abs(fract(x + 0.5) * 2.0 - 1.0);
 }
-float smoothTriangleWave( float x ) {
-  return smoothCurve( triangleWave( x ) ) * 2.0 - 1.0;
+float smoothTriangleWave(float x)
+{
+	return smoothCurve(triangleWave(x)) * 2.0 - 1.0;
 }
 
 void main(void)
 {
 	gl_TexCoord[0] = gl_MultiTexCoord0;
-	
-#if (MATERIAL_TYPE == TILE_MATERIAL_LIQUID_TRANSPARENT || MATERIAL_TYPE == TILE_MATERIAL_LIQUID_OPAQUE) && ENABLE_WAVING_WATER
+	gl_TexCoord[0].y += 0.008;
+
+#if ((DRAW_TYPE == NDT_NORMAL || DRAW_TYPE == NDT_LIQUID || DRAW_TYPE == NDT_FLOWINGLIQUID) && GENERATE_NORMALMAPS)
+	generate_heightmaps = 1.0;
+#else 
+	generate_heightmaps = 0.0;
+#endif
+
+#if ((MATERIAL_TYPE == TILE_MATERIAL_LIQUID_TRANSPARENT || MATERIAL_TYPE == TILE_MATERIAL_LIQUID_OPAQUE) && ENABLE_WAVING_WATER)
 	vec4 pos = gl_Vertex;
 	pos.y -= 2.0;
 
@@ -76,43 +87,33 @@ void main(void)
 
 	vPosition = gl_Position.xyz;
 	worldPosition = (mWorld * gl_Vertex).xyz;
+
+	// Don't generate heightmaps when too far from the eye
+	float dist = distance (worldPosition, eyePosition);
+	if (dist > 100.00) {
+		generate_heightmaps = 0.0;
+	}
+
 	vec3 sunPosition = vec3 (0.0, eyePosition.y * BS + 900.0, 0.0);
 
 	vec3 normal, tangent, binormal;
 	normal = normalize(gl_NormalMatrix * gl_Normal);
-	if (gl_Normal.x > 0.5) {
-		//  1.0,  0.0,  0.0
-		tangent  = normalize(gl_NormalMatrix * vec3( 0.0,  0.0, -1.0));
-		binormal = normalize(gl_NormalMatrix * vec3( 0.0, -1.0,  0.0));
-	} else if (gl_Normal.x < -0.5) {
-		// -1.0,  0.0,  0.0
-		tangent  = normalize(gl_NormalMatrix * vec3( 0.0,  0.0,  1.0));
-		binormal = normalize(gl_NormalMatrix * vec3( 0.0, -1.0,  0.0));
-	} else if (gl_Normal.y > 0.5) {
-		//  0.0,  1.0,  0.0
-		tangent  = normalize(gl_NormalMatrix * vec3( 1.0,  0.0,  0.0));
-		binormal = normalize(gl_NormalMatrix * vec3( 0.0,  0.0,  1.0));
-	} else if (gl_Normal.y < -0.5) {
-		//  0.0, -1.0,  0.0
-		tangent  = normalize(gl_NormalMatrix * vec3( 1.0,  0.0,  0.0));
-		binormal = normalize(gl_NormalMatrix * vec3( 0.0,  0.0,  1.0));
-	} else if (gl_Normal.z > 0.5) {
-		//  0.0,  0.0,  1.0
-		tangent  = normalize(gl_NormalMatrix * vec3( 1.0,  0.0,  0.0));
-		binormal = normalize(gl_NormalMatrix * vec3( 0.0, -1.0,  0.0));
-	} else if (gl_Normal.z < -0.5) {
-		//  0.0,  0.0, -1.0
-		tangent  = normalize(gl_NormalMatrix * vec3(-1.0,  0.0,  0.0));
-		binormal = normalize(gl_NormalMatrix * vec3( 0.0, -1.0,  0.0));
-	}
-	mat3 tbnMatrix = mat3(	tangent.x, binormal.x, normal.x,
-							tangent.y, binormal.y, normal.y,
-							tangent.z, binormal.z, normal.z);
+	tangent = normalize(gl_NormalMatrix * gl_MultiTexCoord1.xyz);
+	binormal = normalize(gl_NormalMatrix * -gl_MultiTexCoord2.xyz);
+
+	vec3 v;
 
 	lightVec = sunPosition - worldPosition;
-	tsLightVec = lightVec * tbnMatrix;
-	eyeVec = (gl_ModelViewMatrix * gl_Vertex).xyz;
-	tsEyeVec = eyeVec * tbnMatrix;
+	v.x = dot(lightVec, tangent);
+	v.y = dot(lightVec, binormal);
+	v.z = dot(lightVec, normal);
+	tsLightVec = v;
+
+	eyeVec = -(gl_ModelViewMatrix * gl_Vertex).xyz;
+	v.x = dot(eyeVec, tangent);
+	v.y = dot(eyeVec, binormal);
+	v.z = dot(eyeVec, normal);
+	tsEyeVec = v;
 
 	vec4 color;
 	float day = gl_Color.r;
diff --git a/client/shaders/water_surface_shader/opengl_fragment.glsl b/client/shaders/water_surface_shader/opengl_fragment.glsl
index 6dc96eb48..386f77486 100644
--- a/client/shaders/water_surface_shader/opengl_fragment.glsl
+++ b/client/shaders/water_surface_shader/opengl_fragment.glsl
@@ -14,7 +14,7 @@ varying vec3 tsEyeVec;
 varying vec3 lightVec;
 varying vec3 tsLightVec;
 
-bool normalTexturePresent = false; 
+bool normalTexturePresent = false;
 
 const float e = 2.718281828459;
 const float BS = 10.0;
@@ -40,15 +40,15 @@ void main (void)
 	vec4 bump;
 	vec2 uv = gl_TexCoord[0].st;
 	bool use_normalmap = false;
-	
+
 #ifdef USE_NORMALMAPS
-	if (texture2D(useNormalmap,vec2(1.0,1.0)).r > 0.0){
+	if (texture2D(useNormalmap,vec2(1.0,1.0)).r > 0.0) {
 		normalTexturePresent = true;
 	}
 #endif
 
 #ifdef ENABLE_PARALLAX_OCCLUSION
-	if (normalTexturePresent){
+	if (normalTexturePresent) {
 		vec3 tsEye = normalize(tsEyeVec);
 		float height = PARALLAX_OCCLUSION_SCALE * texture2D(normalTexture, uv).a - PARALLAX_OCCLUSION_BIAS;
 		uv = uv + texture2D(normalTexture, uv).z * height * vec2(tsEye.x,-tsEye.y);
@@ -56,14 +56,13 @@ void main (void)
 #endif
 
 #ifdef USE_NORMALMAPS
-	if (normalTexturePresent){
+	if (normalTexturePresent) {
 		bump = get_normal_map(uv);
 		use_normalmap = true;
 	} 
 #endif
-		
-#ifdef GENERATE_NORMALMAPS
-	if (use_normalmap == false){
+
+	if (GENERATE_NORMALMAPS == 1 && use_normalmap == false) {
 		float tl = get_rgb_height (vec2(uv.x-SAMPLE_STEP,uv.y+SAMPLE_STEP));
 		float t  = get_rgb_height (vec2(uv.x-SAMPLE_STEP,uv.y-SAMPLE_STEP));
 		float tr = get_rgb_height (vec2(uv.x+SAMPLE_STEP,uv.y+SAMPLE_STEP));
@@ -77,16 +76,15 @@ void main (void)
 		bump = vec4 (normalize(vec3 (dX, -dY, NORMALMAPS_STRENGTH)),1.0);
 		use_normalmap = true;
 	}
-#endif
 
 vec4 base = texture2D(baseTexture, uv).rgba;
-	
+
 #ifdef ENABLE_BUMPMAPPING
-	if (use_normalmap){
+	if (use_normalmap) {
 		vec3 L = normalize(lightVec);
 		vec3 E = normalize(eyeVec);
-		float specular = pow(clamp(dot(reflect(L, bump.xyz), E), 0.0, 1.0),0.5); 
-		float diffuse = dot(E,bump.xyz);		
+		float specular = pow(clamp(dot(reflect(L, bump.xyz), E), 0.0, 1.0),0.5);
+		float diffuse = dot(E,bump.xyz);
 		/* Mathematic optimization
 		* Original: color = 0.05*base.rgb + diffuse*base.rgb + 0.2*specular*base.rgb;
 		* This optimization save 2 multiplications (orig: 4 multiplications + 3 additions
diff --git a/client/shaders/water_surface_shader/opengl_vertex.glsl b/client/shaders/water_surface_shader/opengl_vertex.glsl
index 6e70bbc36..53678800d 100644
--- a/client/shaders/water_surface_shader/opengl_vertex.glsl
+++ b/client/shaders/water_surface_shader/opengl_vertex.glsl
@@ -18,20 +18,23 @@ varying vec3 tsLightVec;
 const float e = 2.718281828459;
 const float BS = 10.0;
 
-float smoothCurve( float x ) {
-  return x * x *( 3.0 - 2.0 * x );
+float smoothCurve(float x)
+{
+	return x * x * (3.0 - 2.0 * x);
 }
-float triangleWave( float x ) {
-  return abs( fract( x + 0.5 ) * 2.0 - 1.0 );
+float triangleWave(float x)
+{
+	return abs(fract( x + 0.5 ) * 2.0 - 1.0);
 }
-float smoothTriangleWave( float x ) {
-  return smoothCurve( triangleWave( x ) ) * 2.0 - 1.0;
+float smoothTriangleWave(float x)
+{
+	return smoothCurve(triangleWave( x )) * 2.0 - 1.0;
 }
 
 void main(void)
 {
 	gl_TexCoord[0] = gl_MultiTexCoord0;
-	
+
 #if (MATERIAL_TYPE == TILE_MATERIAL_LIQUID_TRANSPARENT || MATERIAL_TYPE == TILE_MATERIAL_LIQUID_OPAQUE) && ENABLE_WAVING_WATER
 	vec4 pos = gl_Vertex;
 	pos.y -= 2.0;
diff --git a/minetest.conf.example b/minetest.conf.example
index 76f01bcfc..f73dc3e27 100644
--- a/minetest.conf.example
+++ b/minetest.conf.example
@@ -225,40 +225,47 @@
 #    Set to true to pre-generate all item visuals
 #preload_item_visuals = false
 #    Set to true to enable shaders. Disable them if video_driver = direct3d9/8.
+
 #enable_shaders = true
-#    Set to true to enable textures bumpmapping. Requires shaders enabled.
 #enable_bumpmapping = false
-#    Set to true enables parallax occlusion mapping. Requires shaders enabled.
+#    Set to true to enable textures bumpmapping. Requires shaders enabled.
 #generate_normalmaps = false
 #    Set to true enables on the fly normalmap generation (Emboss effect).
 #    Requires bumpmapping enabled.
 #normalmaps_strength = 0.6
 #    Strength of generated normalmaps
-#normalmaps_smooth = 1
+#normalmaps_smooth = 0
 #    Defines sampling step of texture (0 - 2).
 #    A higher value results in smoother normal maps.
+#parallax_occlusion_mode = 1
+#    0 = parallax occlusion with slope information (faster)
+#    1 = relief mapping (slower, more accurate)
 #enable_parallax_occlusion = false
-#    Scale of parallax occlusion effect
+#    Set to true enables parallax occlusion mapping. Requires shaders enabled.
+#parallax_occlusion_iterations = 4
+#    Number of parallax occlusion iterations
 #parallax_occlusion_scale = 0.08
-#    Bias of parallax occlusion effect, usually scale/2
+#    Overall scale of parallax occlusion effect
 #parallax_occlusion_bias = 0.04
-#    Set to true enables waving water. Requires shaders enabled.
+#    Overall bias of parallax occlusion effect, usually scale/2
 #enable_waving_water = false
+#    Set to true enables waving water. Requires shaders enabled.
 #    Parameters for waving water:
 #water_wave_height = 1.0
 #water_wave_length = 20.0
 #water_wave_speed = 5.0
-#    Set to true enables waving leaves. Requires shaders enabled.
 #enable_waving_leaves = false
-#    Set to true enables waving plants. Requires shaders enabled.
+#    Set to true enables waving leaves. Requires shaders enabled.
 #enable_waving_plants = false
-#    Enables caching of facedir rotated meshes
+#    Set to true enables waving plants. Requires shaders enabled.
 #ambient_occlusion_gamma = 2.2
 #    The strength (darkness) of node ambient-occlusion shading.
 #    Lower is darker, Higher is lighter. The valid range of values for this
 #    setting is 0.25 to 4.0 inclusive. If the value is out of range it will be
 #    set to the nearest valid value.
 #enable_mesh_cache = true
+#    Enables caching of facedir rotated meshes
+
 #    The time in seconds it takes between repeated
 #    right clicks when holding the right mouse button.
 #repeat_rightclick_time = 0.25
diff --git a/src/clientmap.cpp b/src/clientmap.cpp
index 1a52ac4ab..288a12135 100644
--- a/src/clientmap.cpp
+++ b/src/clientmap.cpp
@@ -539,7 +539,7 @@ void ClientMap::renderMap(video::IVideoDriver* driver, s32 pass)
 			MapBlockMesh *mapBlockMesh = block->mesh;
 			assert(mapBlockMesh);
 
-			scene::SMesh *mesh = mapBlockMesh->getMesh();
+			scene::IMesh *mesh = mapBlockMesh->getMesh();
 			assert(mesh);
 
 			u32 c = mesh->getMeshBufferCount();
diff --git a/src/defaultsettings.cpp b/src/defaultsettings.cpp
index 0cf1dd770..eab81009f 100644
--- a/src/defaultsettings.cpp
+++ b/src/defaultsettings.cpp
@@ -160,8 +160,10 @@ void set_default_settings(Settings *settings)
 	settings->setDefault("generate_normalmaps", "false");
 	settings->setDefault("normalmaps_strength", "0.6");
 	settings->setDefault("normalmaps_smooth", "1");
-	settings->setDefault("parallax_occlusion_scale", "0.06");
-	settings->setDefault("parallax_occlusion_bias", "0.03");
+	settings->setDefault("parallax_occlusion_mode", "1");
+	settings->setDefault("parallax_occlusion_iterations", "4");
+	settings->setDefault("parallax_occlusion_scale", "0.08");
+	settings->setDefault("parallax_occlusion_bias", "0.04");
 	settings->setDefault("enable_waving_water", "false");
 	settings->setDefault("water_wave_height", "1.0");
 	settings->setDefault("water_wave_length", "20.0");
diff --git a/src/mapblock_mesh.cpp b/src/mapblock_mesh.cpp
index ab4b63f86..9c755b102 100644
--- a/src/mapblock_mesh.cpp
+++ b/src/mapblock_mesh.cpp
@@ -30,6 +30,7 @@ with this program; if not, write to the Free Software Foundation, Inc.,
 #include "shader.h"
 #include "settings.h"
 #include "util/directiontables.h"
+#include <IMeshManipulator.h>
 
 static void applyFacesShading(video::SColor& color, float factor)
 {
@@ -1028,6 +1029,8 @@ static void updateAllFastFaceRows(MeshMakeData *data,
 MapBlockMesh::MapBlockMesh(MeshMakeData *data, v3s16 camera_offset):
 	m_mesh(new scene::SMesh()),
 	m_gamedef(data->m_gamedef),
+	m_tsrc(m_gamedef->getTextureSource()),
+	m_shdrsrc(m_gamedef->getShaderSource()),
 	m_animation_force_timer(0), // force initial animation
 	m_last_crack(-1),
 	m_crack_materials(),
@@ -1110,8 +1113,6 @@ MapBlockMesh::MapBlockMesh(MeshMakeData *data, v3s16 camera_offset):
 	/*
 		Convert MeshCollector to SMesh
 	*/
-	ITextureSource *tsrc = m_gamedef->tsrc();
-	IShaderSource *shdrsrc = m_gamedef->getShaderSource();
 
 	for(u32 i = 0; i < collector.prebuffers.size(); i++)
 	{
@@ -1123,13 +1124,13 @@ MapBlockMesh::MapBlockMesh(MeshMakeData *data, v3s16 camera_offset):
 		{
 			// Find the texture name plus ^[crack:N:
 			std::ostringstream os(std::ios::binary);
-			os<<tsrc->getTextureName(p.tile.texture_id)<<"^[crack";
+			os<<m_tsrc->getTextureName(p.tile.texture_id)<<"^[crack";
 			if(p.tile.material_flags & MATERIAL_FLAG_CRACK_OVERLAY)
 				os<<"o";  // use ^[cracko
 			os<<":"<<(u32)p.tile.animation_frame_count<<":";
 			m_crack_materials.insert(std::make_pair(i, os.str()));
 			// Replace tile texture with the cracked one
-			p.tile.texture = tsrc->getTextureForMesh(
+			p.tile.texture = m_tsrc->getTextureForMesh(
 					os.str()+"0",
 					&p.tile.texture_id);
 		}
@@ -1158,20 +1159,21 @@ MapBlockMesh::MapBlockMesh(MeshMakeData *data, v3s16 camera_offset):
 
 		for(u32 j = 0; j < p.vertices.size(); j++)
 		{
+			video::S3DVertexTangents *vertex = &p.vertices[j];
 			// Note applyFacesShading second parameter is precalculated sqrt
 			// value for speed improvement
 			// Skip it for lightsources and top faces.
-			video::SColor &vc = p.vertices[j].Color;
+			video::SColor &vc = vertex->Color;
 			if (!vc.getBlue()) {
-				if (p.vertices[j].Normal.Y < -0.5) {
+				if (vertex->Normal.Y < -0.5) {
 					applyFacesShading (vc, 0.447213);
-				} else if (p.vertices[j].Normal.X > 0.5) {
+				} else if (vertex->Normal.X > 0.5) {
 					applyFacesShading (vc, 0.670820);
-				} else if (p.vertices[j].Normal.X < -0.5) {
+				} else if (vertex->Normal.X < -0.5) {
 					applyFacesShading (vc, 0.670820);
-				} else if (p.vertices[j].Normal.Z > 0.5) {
+				} else if (vertex->Normal.Z > 0.5) {
 					applyFacesShading (vc, 0.836660);
-				} else if (p.vertices[j].Normal.Z < -0.5) {
+				} else if (vertex->Normal.Z < -0.5) {
 					applyFacesShading (vc, 0.836660);
 				}
 			}
@@ -1199,33 +1201,30 @@ MapBlockMesh::MapBlockMesh(MeshMakeData *data, v3s16 camera_offset):
 			material.MaterialType = video::EMT_TRANSPARENT_ADD_COLOR;
 		} else {
 			if (m_enable_shaders) {
-				material.MaterialType = shdrsrc->getShaderInfo(p.tile.shader_id).material;
+				material.MaterialType = m_shdrsrc->getShaderInfo(p.tile.shader_id).material;
 				p.tile.applyMaterialOptionsWithShaders(material);
 				if (p.tile.normal_texture) {
 					material.setTexture(1, p.tile.normal_texture);
-					material.setTexture(2, tsrc->getTextureForMesh("enable_img.png"));
+					material.setTexture(2, m_tsrc->getTextureForMesh("enable_img.png"));
 				} else {
-					material.setTexture(2, tsrc->getTextureForMesh("disable_img.png"));
+					material.setTexture(2, m_tsrc->getTextureForMesh("disable_img.png"));
 				}
 			} else {
 				p.tile.applyMaterialOptions(material);
 			}
 		}
-
-		// Create meshbuffer
-		// This is a "Standard MeshBuffer",
-		// it's a typedeffed CMeshBuffer<video::S3DVertex>
-		scene::SMeshBuffer *buf = new scene::SMeshBuffer();
-		// Set material
-		buf->Material = material;
-		// Add to mesh
-		m_mesh->addMeshBuffer(buf);
-		// Mesh grabbed it
-		buf->drop();
-		buf->append(&p.vertices[0], p.vertices.size(),
-				&p.indices[0], p.indices.size());
-	}
-
+	
+	// Create meshbuffer
+	scene::SMeshBufferTangents *buf = new scene::SMeshBufferTangents();
+	// Set material
+	buf->Material = material;
+	// Add to mesh
+	m_mesh->addMeshBuffer(buf);
+	// Mesh grabbed it
+	buf->drop();
+	buf->append(&p.vertices[0], p.vertices.size(),
+		&p.indices[0], p.indices.size());
+}
 	m_camera_offset = camera_offset;
 
 	/*
@@ -1234,6 +1233,11 @@ MapBlockMesh::MapBlockMesh(MeshMakeData *data, v3s16 camera_offset):
 
 	translateMesh(m_mesh, intToFloat(data->m_blockpos * MAP_BLOCKSIZE - camera_offset, BS));
 
+	if (m_enable_shaders) {
+		scene::IMeshManipulator* meshmanip = m_gamedef->getSceneManager()->getMeshManipulator();
+		meshmanip->recalculateTangents(m_mesh, true, false, false);
+	}
+
 	if(m_mesh)
 	{
 #if 0
@@ -1272,7 +1276,6 @@ MapBlockMesh::~MapBlockMesh()
 
 bool MapBlockMesh::animate(bool faraway, float time, int crack, u32 daynight_ratio)
 {
-
 	if(!m_has_animation)
 	{
 		m_animation_force_timer = 100000;
@@ -1292,12 +1295,11 @@ bool MapBlockMesh::animate(bool faraway, float time, int crack, u32 daynight_rat
 			std::string basename = i->second;
 
 			// Create new texture name from original
-			ITextureSource *tsrc = m_gamedef->getTextureSource();
 			std::ostringstream os;
 			os<<basename<<crack;
 			u32 new_texture_id = 0;
 			video::ITexture *new_texture =
-				tsrc->getTextureForMesh(os.str(), &new_texture_id);
+				m_tsrc->getTextureForMesh(os.str(), &new_texture_id);
 			buf->getMaterial().setTexture(0, new_texture);
 
 			// If the current material is also animated,
@@ -1333,16 +1335,15 @@ bool MapBlockMesh::animate(bool faraway, float time, int crack, u32 daynight_rat
 		m_animation_frames[i->first] = frame;
 
 		scene::IMeshBuffer *buf = m_mesh->getMeshBuffer(i->first);
-		ITextureSource *tsrc = m_gamedef->getTextureSource();
 
 		FrameSpec animation_frame = tile.frames[frame];
 		buf->getMaterial().setTexture(0, animation_frame.texture);
 		if (m_enable_shaders) {
 			if (animation_frame.normal_texture) {
 				buf->getMaterial().setTexture(1, animation_frame.normal_texture);
-				buf->getMaterial().setTexture(2, tsrc->getTextureForMesh("enable_img.png"));
+				buf->getMaterial().setTexture(2, m_tsrc->getTextureForMesh("enable_img.png"));
 			} else {
-				buf->getMaterial().setTexture(2, tsrc->getTextureForMesh("disable_img.png"));
+				buf->getMaterial().setTexture(2, m_tsrc->getTextureForMesh("disable_img.png"));
 			}
 		}
 	}
@@ -1355,16 +1356,14 @@ bool MapBlockMesh::animate(bool faraway, float time, int crack, u32 daynight_rat
 				i != m_daynight_diffs.end(); i++)
 		{
 			scene::IMeshBuffer *buf = m_mesh->getMeshBuffer(i->first);
-			video::S3DVertex *vertices = (video::S3DVertex*)buf->getVertices();
+			video::S3DVertexTangents *vertices = (video::S3DVertexTangents *)buf->getVertices();
 			for(std::map<u32, std::pair<u8, u8 > >::iterator
 					j = i->second.begin();
 					j != i->second.end(); j++)
 			{
-				u32 vertexIndex = j->first;
 				u8 day = j->second.first;
 				u8 night = j->second.second;
-				finalColorBlend(vertices[vertexIndex].Color,
-						day, night, daynight_ratio);
+				finalColorBlend(vertices[j->first].Color, day, night, daynight_ratio);
 			}
 		}
 		m_last_daynight_ratio = daynight_ratio;
@@ -1388,7 +1387,7 @@ bool MapBlockMesh::animate(bool faraway, float time, int crack, u32 daynight_rat
 			i != m_highlighted_materials.end(); i++)
 		{
 			scene::IMeshBuffer *buf = m_mesh->getMeshBuffer(*i);
-			video::S3DVertex *vertices = (video::S3DVertex*)buf->getVertices();
+			video::S3DVertexTangents *vertices = (video::S3DVertexTangents*)buf->getVertices();
 			for (u32 j = 0; j < buf->getVertexCount() ;j++)
 				vertices[j].Color = hc;
 		}
@@ -1413,42 +1412,40 @@ void MeshCollector::append(const TileSpec &tile,
 		const video::S3DVertex *vertices, u32 numVertices,
 		const u16 *indices, u32 numIndices)
 {
-	if(numIndices > 65535)
-	{
+	if (numIndices > 65535) {
 		dstream<<"FIXME: MeshCollector::append() called with numIndices="<<numIndices<<" (limit 65535)"<<std::endl;
 		return;
 	}
 
 	PreMeshBuffer *p = NULL;
-	for(u32 i=0; i<prebuffers.size(); i++)
-	{
+	for (u32 i = 0; i < prebuffers.size(); i++) {
 		PreMeshBuffer &pp = prebuffers[i];
-		if(pp.tile != tile)
+		if (pp.tile != tile)
 			continue;
-		if(pp.indices.size() + numIndices > 65535)
+		if (pp.indices.size() + numIndices > 65535)
 			continue;
 
 		p = &pp;
 		break;
 	}
 
-	if(p == NULL)
-	{
+	if (p == NULL) {
 		PreMeshBuffer pp;
 		pp.tile = tile;
 		prebuffers.push_back(pp);
-		p = &prebuffers[prebuffers.size()-1];
+		p = &prebuffers[prebuffers.size() - 1];
 	}
 
 	u32 vertex_count = p->vertices.size();
-	for(u32 i=0; i<numIndices; i++)
-	{
+	for (u32 i = 0; i < numIndices; i++)	{
 		u32 j = indices[i] + vertex_count;
 		p->indices.push_back(j);
 	}
-	for(u32 i=0; i<numVertices; i++)
-	{
-		p->vertices.push_back(vertices[i]);
+
+	for (u32 i = 0; i < numVertices; i++) {
+		video::S3DVertexTangents vert(vertices[i].Pos, vertices[i].Normal,
+			vertices[i].Color, vertices[i].TCoords);
+		p->vertices.push_back(vert);
 	}
 }
 
@@ -1461,15 +1458,13 @@ void MeshCollector::append(const TileSpec &tile,
 		const u16 *indices, u32 numIndices,
 		v3f pos, video::SColor c)
 {
-	if(numIndices > 65535)
-	{
+	if (numIndices > 65535) {
 		dstream<<"FIXME: MeshCollector::append() called with numIndices="<<numIndices<<" (limit 65535)"<<std::endl;
 		return;
 	}
 
 	PreMeshBuffer *p = NULL;
-	for(u32 i=0; i<prebuffers.size(); i++)
-	{
+	for (u32 i = 0; i < prebuffers.size(); i++) {
 		PreMeshBuffer &pp = prebuffers[i];
 		if(pp.tile != tile)
 			continue;
@@ -1480,25 +1475,22 @@ void MeshCollector::append(const TileSpec &tile,
 		break;
 	}
 
-	if(p == NULL)
-	{
+	if (p == NULL) {
 		PreMeshBuffer pp;
 		pp.tile = tile;
 		prebuffers.push_back(pp);
-		p = &prebuffers[prebuffers.size()-1];
+		p = &prebuffers[prebuffers.size() - 1];
 	}
 
 	u32 vertex_count = p->vertices.size();
-	for(u32 i=0; i<numIndices; i++)
-	{
+	for (u32 i = 0; i < numIndices; i++) {
 		u32 j = indices[i] + vertex_count;
 		p->indices.push_back(j);
 	}
-	for(u32 i=0; i<numVertices; i++)
-	{
-		video::S3DVertex vert = vertices[i];
-		vert.Pos += pos;
-		vert.Color = c;		
+
+	for (u32 i = 0; i < numVertices; i++) {
+		video::S3DVertexTangents vert(vertices[i].Pos + pos, vertices[i].Normal,
+			c, vertices[i].TCoords);
 		p->vertices.push_back(vert);
 	}
 }
diff --git a/src/mapblock_mesh.h b/src/mapblock_mesh.h
index b334ce469..72c90c3e5 100644
--- a/src/mapblock_mesh.h
+++ b/src/mapblock_mesh.h
@@ -26,6 +26,7 @@ with this program; if not, write to the Free Software Foundation, Inc.,
 #include <map>
 
 class IGameDef;
+class IShaderSource;
 
 /*
 	Mesh making stuff
@@ -123,6 +124,8 @@ public:
 private:
 	scene::SMesh *m_mesh;
 	IGameDef *m_gamedef;
+	ITextureSource *m_tsrc;
+	IShaderSource *m_shdrsrc;
 
 	bool m_enable_shaders;
 	bool m_enable_highlighting;
@@ -165,13 +168,12 @@ struct PreMeshBuffer
 {
 	TileSpec tile;
 	std::vector<u16> indices;
-	std::vector<video::S3DVertex> vertices;
+	std::vector<video::S3DVertexTangents> vertices;
 };
 
 struct MeshCollector
 {
 	std::vector<PreMeshBuffer> prebuffers;
-
 	void append(const TileSpec &material,
 			const video::S3DVertex *vertices, u32 numVertices,
 			const u16 *indices, u32 numIndices);
diff --git a/src/mesh.cpp b/src/mesh.cpp
index e021e4c92..6c7c6d37b 100644
--- a/src/mesh.cpp
+++ b/src/mesh.cpp
@@ -94,26 +94,25 @@ scene::IAnimatedMesh* createCubeMesh(v3f scale)
 
 void scaleMesh(scene::IMesh *mesh, v3f scale)
 {
-	if(mesh == NULL)
+	if (mesh == NULL)
 		return;
 
 	core::aabbox3d<f32> bbox;
-	bbox.reset(0,0,0);
+	bbox.reset(0, 0, 0);
 
-	u16 mc = mesh->getMeshBufferCount();
-	for(u16 j=0; j<mc; j++)
-	{
+	u32 mc = mesh->getMeshBufferCount();
+	for (u32 j = 0; j < mc; j++) {
 		scene::IMeshBuffer *buf = mesh->getMeshBuffer(j);
-		video::S3DVertex *vertices = (video::S3DVertex*)buf->getVertices();
-		u16 vc = buf->getVertexCount();
-		for(u16 i=0; i<vc; i++)
-		{
-			vertices[i].Pos *= scale;
-		}
+		const u32 stride = getVertexPitchFromType(buf->getVertexType());
+		u32 vertex_count = buf->getVertexCount();
+		u8 *vertices = (u8 *)buf->getVertices();
+		for (u32 i = 0; i < vertex_count; i++) 
+			((video::S3DVertex *)(vertices + i * stride))->Pos *= scale;
+
 		buf->recalculateBoundingBox();
 
 		// calculate total bounding box
-		if(j == 0)
+		if (j == 0)
 			bbox = buf->getBoundingBox();
 		else
 			bbox.addInternalBox(buf->getBoundingBox());
@@ -123,26 +122,25 @@ void scaleMesh(scene::IMesh *mesh, v3f scale)
 
 void translateMesh(scene::IMesh *mesh, v3f vec)
 {
-	if(mesh == NULL)
+	if (mesh == NULL)
 		return;
 
 	core::aabbox3d<f32> bbox;
-	bbox.reset(0,0,0);
+	bbox.reset(0, 0, 0);
 
-	u16 mc = mesh->getMeshBufferCount();
-	for(u16 j=0; j<mc; j++)
-	{
+	u32 mc = mesh->getMeshBufferCount();
+	for (u32 j = 0; j < mc; j++) {
 		scene::IMeshBuffer *buf = mesh->getMeshBuffer(j);
-		video::S3DVertex *vertices = (video::S3DVertex*)buf->getVertices();
-		u16 vc = buf->getVertexCount();
-		for(u16 i=0; i<vc; i++)
-		{
-			vertices[i].Pos += vec;
-		}
+		const u32 stride = getVertexPitchFromType(buf->getVertexType());
+		u32 vertex_count = buf->getVertexCount();
+		u8 *vertices = (u8 *)buf->getVertices();
+		for (u32 i = 0; i < vertex_count; i++) 
+			((video::S3DVertex *)(vertices + i * stride))->Pos += vec;
+
 		buf->recalculateBoundingBox();
 
 		// calculate total bounding box
-		if(j == 0)
+		if (j == 0)
 			bbox = buf->getBoundingBox();
 		else
 			bbox.addInternalBox(buf->getBoundingBox());
@@ -150,21 +148,20 @@ void translateMesh(scene::IMesh *mesh, v3f vec)
 	mesh->setBoundingBox(bbox);
 }
 
+
 void setMeshColor(scene::IMesh *mesh, const video::SColor &color)
 {
-	if(mesh == NULL)
+	if (mesh == NULL)
 		return;
-	
-	u16 mc = mesh->getMeshBufferCount();
-	for(u16 j=0; j<mc; j++)
-	{
+
+	u32 mc = mesh->getMeshBufferCount();
+	for (u32 j = 0; j < mc; j++) {
 		scene::IMeshBuffer *buf = mesh->getMeshBuffer(j);
-		video::S3DVertex *vertices = (video::S3DVertex*)buf->getVertices();
-		u16 vc = buf->getVertexCount();
-		for(u16 i=0; i<vc; i++)
-		{
-			vertices[i].Color = color;
-		}
+		const u32 stride = getVertexPitchFromType(buf->getVertexType());
+		u32 vertex_count = buf->getVertexCount();
+		u8 *vertices = (u8 *)buf->getVertices();
+		for (u32 i = 0; i < vertex_count; i++) 
+			((video::S3DVertex *)(vertices + i * stride))->Color = color;
 	}
 }
 
diff --git a/src/shader.cpp b/src/shader.cpp
index a467c2ea9..a6d18e1be 100644
--- a/src/shader.cpp
+++ b/src/shader.cpp
@@ -680,42 +680,54 @@ ShaderInfo generate_shader(std::string name, u8 material_type, u8 drawtype,
 	shaders_header += itos(drawtype);
 	shaders_header += "\n";
 
-	if (g_settings->getBool("generate_normalmaps")){
-		shaders_header += "#define GENERATE_NORMALMAPS\n";
-		shaders_header += "#define NORMALMAPS_STRENGTH ";
-		shaders_header += ftos(g_settings->getFloat("normalmaps_strength"));
-		shaders_header += "\n";
-		float sample_step;
-		int smooth = (int)g_settings->getFloat("normalmaps_smooth");
-		switch (smooth){
-		case 0:
-			sample_step = 0.0078125; // 1.0 / 128.0
-			break;
-		case 1:
-			sample_step = 0.00390625; // 1.0 / 256.0
-			break;
-		case 2:
-			sample_step = 0.001953125; // 1.0 / 512.0
-			break;
-		default:
-			sample_step = 0.0078125;
-			break;
-		}
-		shaders_header += "#define SAMPLE_STEP ";
-		shaders_header += ftos(sample_step);
-		shaders_header += "\n";
+	if (g_settings->getBool("generate_normalmaps")) {
+		shaders_header += "#define GENERATE_NORMALMAPS 1\n";
+	} else {
+		shaders_header += "#define GENERATE_NORMALMAPS 0\n";
 	}
+	shaders_header += "#define NORMALMAPS_STRENGTH ";
+	shaders_header += ftos(g_settings->getFloat("normalmaps_strength"));
+	shaders_header += "\n";
+	float sample_step;
+	int smooth = (int)g_settings->getFloat("normalmaps_smooth");
+	switch (smooth){
+	case 0:
+		sample_step = 0.0078125; // 1.0 / 128.0
+		break;
+	case 1:
+		sample_step = 0.00390625; // 1.0 / 256.0
+		break;
+	case 2:
+		sample_step = 0.001953125; // 1.0 / 512.0
+		break;
+	default:
+		sample_step = 0.0078125;
+		break;
+	}
+	shaders_header += "#define SAMPLE_STEP ";
+	shaders_header += ftos(sample_step);
+	shaders_header += "\n";
 
 	if (g_settings->getBool("enable_bumpmapping"))
 		shaders_header += "#define ENABLE_BUMPMAPPING\n";
 
 	if (g_settings->getBool("enable_parallax_occlusion")){
+		int mode = g_settings->getFloat("parallax_occlusion_mode");
+		float scale = g_settings->getFloat("parallax_occlusion_scale");
+		float bias = g_settings->getFloat("parallax_occlusion_bias");
+		int iterations = g_settings->getFloat("parallax_occlusion_iterations");
 		shaders_header += "#define ENABLE_PARALLAX_OCCLUSION\n";
+		shaders_header += "#define PARALLAX_OCCLUSION_MODE ";
+		shaders_header += itos(mode);
+		shaders_header += "\n";
 		shaders_header += "#define PARALLAX_OCCLUSION_SCALE ";
-		shaders_header += ftos(g_settings->getFloat("parallax_occlusion_scale"));
+		shaders_header += ftos(scale);
 		shaders_header += "\n";
 		shaders_header += "#define PARALLAX_OCCLUSION_BIAS ";
-		shaders_header += ftos(g_settings->getFloat("parallax_occlusion_bias"));
+		shaders_header += ftos(bias);
+		shaders_header += "\n";
+		shaders_header += "#define PARALLAX_OCCLUSION_ITERATIONS ";
+		shaders_header += itos(iterations);
 		shaders_header += "\n";
 	}
 
@@ -755,7 +767,6 @@ ShaderInfo generate_shader(std::string name, u8 material_type, u8 drawtype,
 		vertex_program = shaders_header + vertex_program;
 	if(geometry_program != "")
 		geometry_program = shaders_header + geometry_program;
-
 	// Call addHighLevelShaderMaterial() or addShaderMaterial()
 	const c8* vertex_program_ptr = 0;
 	const c8* pixel_program_ptr = 0;