Cannot view water datablock

I downloaded the "updated" TSE using CVS

A new folder (terrain_water_demo) was added.
I was able to compile it without errors and TSE terrain_water_demo was able to load.

However, I can't see the waterblock. I checked the log and found this

Errors:
Invalid Material name: Water: for WaterBlock ps2.0+ surface
Invalid Material name: Underwater: for WaterBlock ps2.0+ surface
Invalid Material name: Water1_1FogPass: for WaterBlock ps2.0+ surface
Invalid Material name: WaterBlendMat: for WaterBlock ps2.0+ surface
Invalid Material name: WaterFallback1_1: for WaterBlock ps2.0+ surface

According to this thread
http://www.garagegames.com/mg/forums/result.thread.php?qt=32490

the material needs to be in the same folder as materials.cs
None of the material files needed for the waterblock was found in the demo folder.
Is there any option I need to checked when updating CVS or I get these files somewhere else?

Best rgds :)