Does anyone know where I can find rules for water terrain?

Water terrain acts like hindering terrain for movement, but doesn't give the "+1 defense against range attacks" benefit, right?

Water terrain is special hindering terrain. Treat it as hindering terrain for everything, except when a LOF crosses water...the water is clear terrain for LOF. So it will not activate stealth and there is no hindering terrain modifier cause by water. (Other hindering terrain in that LOF could cause it, but the water doesn't.)

Thanks, HC 1234. That clears up water terrain for me, but what about this quote from your sig. line?

Huh? I thought "grounded" for a flyer meant that the lime-green color was showing in the pieces movement stats, and that hovering characters can fly right over hindering terrain or water terrain (that's the way we've been playing!).

Grounded is a game term which means not elevated and not soaring. The term you are thinking of is non-flyer. When a flyer has Earthbound it is a non-flyer. Having Earthbound (becoming a non-flyer) has nothing to do with being grounded (not elevated and not soaring) which is a totally different concept.

(And hovering characters can ignore the effects of hindering terrain...which includes water...on movement.)