Yes, that's what it looks like in the game. I just bought it.
The edges have a kinda "fake" texture to it, but the water surface is awesome. Keep in mind that this is running on a Intel Pentium III based CPU running at 733mhz, nVIDIA GeForce 3 based graphics chip and 64mb of DDR RAM. Ubisoft Montreal did a great job recreating the game to utilize the full hardware potential of the Xbox.
Imagine this game with the power of the Xbox 360... O.O
Just a note for you FarCry fans: FarCry: Instincts isn't a sequel or any extension of the PC version. It's a completely seperate storyline but with the same characters (i.e. Jack Carver, Val Cortez, David Doyle, Col. Crowe, Dr. Krieger etc).