Somethings missing

In the attached pic, my character's hair is missing while being underwater and you'll notice the cape isn't showing all the way. I've noticed it from other parts like grass in front of clothing, hair from different angles, etc etc. Sometimes I'll even see the polygons not being so transparent when I stand in front of certain things.

specs:
AMD Athlon 3200+ 2.00ghz 2gb
Geforce 6600 256mb
Win XP

Any way to fix this?

Nope. can't fix it - it's an age old anomaly. Doesn't matter what computer you have, it will always happen because it's just the game.

Ahh i remember the day i first seen that,try taking your pants off underwater next time ;P

Transparency of objects is so you can see your character even if something is obstructing your view.

I've added a few more pictures just to clarify. On character select, you can also see where the hair is clipping.

those are normal. it's just the way it is.