ok ive gotten environmental bump mapping to work.. here is the code:

Code:

---

function mtl_env_view()
{
  mat_set(mtl.matrix,matViewInv);
// reset the translation part of the matrix
  mtl.matrix41 = 0;
  mtl.matrix42 = 0;
  mtl.matrix43 = 0;

 // mat_scale(mtl.matrix,0.5,0.5,0.5);
}

function mtl_water_init
{
	vec_set(mtl.emissive_blue,mat_model.emissive_blue);
	vec_set(mtl.ambient_blue,mat_model.ambient_blue);
	vec_set(mtl.diffuse_blue,mat_model.diffuse_blue);
	vec_set(mtl.specular_blue,mat_model.specular_blue);
	mtl.power=mat_model.power;
	mtl.albedo=mat_model.albedo;
	bmap_to_cubemap(mtl.skin3);
	mtl.enable_render=on;
	mtl.event=mtl_env_view;
}

bmap water = <water_1.tga>;
bmap caustic = <water_1_caustic.tga>;
bmap enviromap = <envmap+6.tga>;

material mat_water
 {
 	event=mtl_water_init;
 	skin1=water;
 	skin2=caustic;
 	skin3=enviromap;

	effect=
	"
    texture mtlSkin1;
    texture mtlSkin2;
    texture mtlSkin3;
    matrix matMtl;
    matrix matWorld;

    technique envcube
    {
      pass p0
      {
        Lighting       = True;
        SpecularEnable = True;

		  ADDRESSU[0]=wrap;
		  ADDRESSV[0]=wrap;
		  ADDRESSU[1]=wrap;
		  ADDRESSV[1]=wrap;
		  ADDRESSU[2]=wrap;
		  ADDRESSV[2]=wrap;

   
		 // Stage0
        MinFilter[0] = Linear;
        MagFilter[0] = Linear;
        MipFilter[0] = Point;


        Texture[0] = <mtlSkin1>;
      //TextureTransform[0] = <matWorld>;
      //TextureTransformFlags[0] = Count2;
             
        ColorOp[0]   = SelectArg1;
        ColorArg1[0] = Texture;
        AlphaOp[0]   = SelectArg2;
        AlphaArg2[0] = Current;

         // Stage1
        MinFilter[1] = Linear;
        MagFilter[1] = Linear;
        MipFilter[1] = Point;
     
        Texture[1] = <mtlSkin2>;
     // TextureTransform[1] = <matWorld>;
     // TextureTransformFlags[1] = Count2;
 
        ColorOp[1]   = bumpenvmap;
        ColorArg1[1] = Texture;
        ColorArg2[1] = Current;
        AlphaOp[1]   = SelectArg2;
        AlphaArg2[1] = Current;


        // Stage2
        MinFilter[2] = Linear;
        MagFilter[2] = Linear;
        MipFilter[2] = Point;

        Texture[2] = <mtlSkin3>;
        TextureTransform[2] = <matMtl>;
        TextureTransformFlags[2] = Count3;
        TexCoordIndex[2] = cameraspacereflectionvector;
        
        ColorOp[2]   = modulate;
        ColorArg1[2] = Texture;
        ColorArg2[2] = Current;
        AlphaOp[2]   = SelectArg2;
        AlphaArg2[2] = Current;


		}
	}
";
 }  

---