"The Lake object is a Displaceable object. Displaceable objects don't render well with ray tracing currently. It shouldn't disappear, that's probably a bug, but in general you should not try to force Displaceable objects from rendering with Ray Tracing. You'll see the same behavior from any other Displaceable Object (they're in a separate part of the Objects list; the Lake is basically similar to Plane as I understand it).
When you say "it just didn't compare to raytraced results", what are you comparing to if you couldn't get the lake to render that way? In other words what ray traced result are you seeing that makes you expect ray tracing to improve the look of the water? Object ray tracing is enabled by default and ray tracing provides the best quality for *non-displaceable* objects, that's definitely true. But I think what you're seeing with water is likely a result of the reflection aspect of it, which is really about antialiasing the reflection, and not the water surface itself, if that makes sense.
- shyan"
I used the Advanced Render option "Raytrace Everything" option. I get some decent result with the water using this method, but I didn't want to Raytrace anything else (terrain), which is why I was trying the Raytrace render method within the Lake object itself. Not sure why it is there if it's not usable, but from what you have said it seems that the reason I like raytrace better is that it is eliminating the displacement. I should, in theory, get a similar result just from turning down the displacement using the default render method. Though still curious why there is a raytracing render method in the lake object if it disables the displacement?
Thanks for the input it has at least clarified a few things and sets me off in a better direction to deal with it.