Also what exactly are "shaders". I'm guessing it's a programmed script that draws pixels in a specific way...but can someone explain how "shallow water shaders" are more "advanced" in the next-gen version of this game?
Shaders are like scripts, yes, but they have a very cut down language without alot of features, and they run lightning fast on the videocards instead of the CPU.
There are multiple places in graphics APIs where you can plug in a shader to do custom work, and depending on where you plug them in, the shaders have different names. Geometry shaders work with meshes of polygons (I think), Vertex shaders work on each corner of triangles, and Fragment shaders work on each 'fragment' of triangles (where 'fragment' can kinda be thought of as a pixel, but not exactly).
I'm not sure if there were any talks yet about AC4's oceans, but GDC is in two weeks, so you might get some details then.