Torque specifically says it supports Mirrors in the demo (or that's TGEA, I think it's that, but whatever).
People should get better computers, or they should have the option of turning mirrored surfaces off.
I think this would be a really cool idea.
Fun fact: Undulo is in it's own paint group, shapeFX. It's shapeFX Id is 1, and ShapeFX id 2 is the water effect!