diff --git a/source/graphics/MapReader.cpp b/source/graphics/MapReader.cpp
index d37502c6ed..44adf92ecb 100644
--- a/source/graphics/MapReader.cpp
+++ b/source/graphics/MapReader.cpp
@@ -549,6 +549,7 @@ void CXMLReader::ReadCamera(XMBElement parent)
 	m_MapReader.pCamera->m_Orientation.Translate(translation);
 	m_MapReader.pCamera->UpdateFrustum();
 }
+
 void CXMLReader::ReadCinema(XMBElement parent)
 {
 	#define EL(x) int el_##x = xmb_file.getElementID(#x)
diff --git a/source/graphics/ObjectBase.cpp b/source/graphics/ObjectBase.cpp
index e41a2b52c0..185be661b8 100644
--- a/source/graphics/ObjectBase.cpp
+++ b/source/graphics/ObjectBase.cpp
@@ -15,6 +15,7 @@ CObjectBase::CObjectBase()
 {
 	m_Properties.m_CastShadows = true;
 	m_Properties.m_AutoFlatten = false;
+	m_Properties.m_FloatOnWater = false;
 }
 
 bool CObjectBase::Load(const char* filename)
@@ -37,7 +38,8 @@ bool CObjectBase::Load(const char* filename)
 	#define EL(x) int el_##x = XeroFile.getElementID(#x)
 	#define AT(x) int at_##x = XeroFile.getAttributeID(#x)
 	EL(actor);
-	//EL(castshadow);
+	EL(castshadow);
+	EL(float);
 	EL(material);
 	EL(group);
 	EL(variant);
@@ -201,6 +203,14 @@ bool CObjectBase::Load(const char* filename)
 
 			++currentGroup;
 		}
+		else if (child_name == el_castshadow)
+		{
+			m_Properties.m_CastShadows = true; // TODO: this is the default, so it's a bit useless
+		}
+		else if (child_name == el_float)
+		{
+			m_Properties.m_FloatOnWater = true;
+		}
 		else if (child_name == el_material)
 		{
 			m_Material = "art/materials/" + CStr(child.getText());
diff --git a/source/graphics/ObjectBase.h b/source/graphics/ObjectBase.h
index d6c480fb61..72c0375435 100644
--- a/source/graphics/ObjectBase.h
+++ b/source/graphics/ObjectBase.h
@@ -90,6 +90,8 @@ public:
 		bool m_AutoFlatten;
 		// cast shadows from this object
 		bool m_CastShadows;
+		// float on top of water
+		bool m_FloatOnWater;
 	} m_Properties;
 
 	// the material file
diff --git a/source/graphics/Unit.h b/source/graphics/Unit.h
index 5bbf1cc35a..2519fe6422 100644
--- a/source/graphics/Unit.h
+++ b/source/graphics/Unit.h
@@ -29,11 +29,11 @@ public:
 	~CUnit();
 
 	// get unit's template object; never NULL
-	CObjectEntry* GetObject() { return m_Object; }
+	CObjectEntry* GetObject() const { return m_Object; }
 	// get unit's model data; never NULL
-	CModel* GetModel() { return m_Model; }
+	CModel* GetModel() const { return m_Model; }
 	// get actor's entity; can be NULL
-	CEntity* GetEntity() { return m_Entity; }
+	CEntity* GetEntity() const { return m_Entity; }
 
 	// Put here as it conveniently references both the model and the ObjectEntry
 	void ShowAmmunition();
diff --git a/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.cpp b/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.cpp
index f034b5c204..51aead7da9 100644
--- a/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.cpp
+++ b/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.cpp
@@ -56,6 +56,9 @@ ActorEditor::ActorEditor(wxWindow* parent)
 	m_CastShadows = new wxCheckBox(propertiesPanel, wxID_ANY, _("Cast shadow"));
 	propertiesSizer->Add(m_CastShadows, wxSizerFlags().Border(wxALL, 5));
 
+	m_Float = new wxCheckBox(propertiesPanel, wxID_ANY, _("Float on water"));
+	propertiesSizer->Add(m_Float, wxSizerFlags().Border(wxALL, 5));
+
 	// TODO: Orientation property.
 
 	//////////////////////////////////////////////////////////////////////////
@@ -79,10 +82,6 @@ ActorEditor::ActorEditor(wxWindow* parent)
 	m_Material = new wxComboBox(materialsPanel, wxID_ANY, _T(""), wxDefaultPosition, wxDefaultSize, materials);
 	materialsSizer->Add(m_Material, wxSizerFlags().Border(wxALL, 2));
 
-	//////////////////////////////////////////////////////////////////////////
-
-//	void convert_actors();
-//	convert_actors();
 }
 
 void ActorEditor::ThawData(AtObj& in)
@@ -90,11 +89,8 @@ void ActorEditor::ThawData(AtObj& in)
 	AtObj actor (in["actor"]);
 	m_ActorEditorListCtrl->ThawData(actor);
 
-	if (actor["castshadow"].defined())
-		m_CastShadows->SetValue(true);
-	else
-		m_CastShadows->SetValue(false);
-
+	m_CastShadows->SetValue(actor["castshadow"].defined());
+	m_Float->SetValue(actor["float"].defined());
 	m_Material->SetValue(actor["material"]);
 }
 
@@ -105,6 +101,9 @@ AtObj ActorEditor::FreezeData()
 	if (m_CastShadows->IsChecked())
 		actor.set("castshadow", L"");
 
+	if (m_Float->IsChecked())
+		actor.set("float", L"");
+
 	if (m_Material->GetValue().length())
 		actor.set("material", m_Material->GetValue().c_str());
 
@@ -301,11 +300,8 @@ void ActorEditor::ImportData(AtObj& in)
 	AtObj actor (data["actor"]);
 	m_ActorEditorListCtrl->ImportData(actor);
 
-	if (actor["castshadow"].defined())
-		m_CastShadows->SetValue(true);
-	else
-		m_CastShadows->SetValue(false);
-
+	m_CastShadows->SetValue(actor["castshadow"].defined());
+	m_Float->SetValue(actor["float"].defined());
 	m_Material->SetValue(actor["material"]);
 }
 
@@ -319,6 +315,9 @@ AtObj ActorEditor::ExportData()
 	if (m_CastShadows->IsChecked())
 		actor.set("castshadow", L"");
 
+	if (m_Float->IsChecked())
+		actor.set("float", L"");
+
 	if (m_Material->GetValue().length())
 		actor.set("material", m_Material->GetValue().c_str());
 
diff --git a/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.h b/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.h
index bfaf3588e3..fb3f202f76 100644
--- a/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.h
+++ b/source/tools/atlas/AtlasUI/ActorEditor/ActorEditor.h
@@ -22,12 +22,16 @@ protected:
 	AtObj ExportData();
 	void ImportData(AtObj& in);
 
+	// TODO: er, what's the difference between freeze/thaw and export/import?
+	// Why is the code duplicated between them?
+
 	virtual wxString GetDefaultOpenDirectory();
 
 private:
 	ActorEditorListCtrl* m_ActorEditorListCtrl;
 
 	wxCheckBox* m_CastShadows;
+	wxCheckBox* m_Float;
 	wxComboBox* m_Material;
 
 	DECLARE_EVENT_TABLE();
diff --git a/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.cpp b/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.cpp
index 8ad4a08355..ec1fe77450 100644
--- a/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.cpp
+++ b/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.cpp
@@ -55,14 +55,14 @@ END_EVENT_TABLE()
 IMPLEMENT_CLASS(AtlasWindow, wxFrame);
 
 BEGIN_EVENT_TABLE(AtlasWindow, wxFrame)
-	EVT_MENU(ID_New, AtlasWindow::OnNew)
+	EVT_MENU(wxID_NEW, AtlasWindow::OnNew)
 //	EVT_MENU(ID_Import, AtlasWindow::OnImport)
 //	EVT_MENU(ID_Export, AtlasWindow::OnExport)
-	EVT_MENU(ID_Open, AtlasWindow::OnOpen)
-	EVT_MENU(ID_Save, AtlasWindow::OnSave)
-	EVT_MENU(ID_SaveAs, AtlasWindow::OnSaveAs)
+	EVT_MENU(wxID_OPEN, AtlasWindow::OnOpen)
+	EVT_MENU(wxID_SAVE, AtlasWindow::OnSave)
+	EVT_MENU(wxID_SAVEAS, AtlasWindow::OnSaveAs)
 	EVT_MENU_RANGE(wxID_FILE1, wxID_FILE9, AtlasWindow::OnMRUFile)
-	EVT_MENU(ID_Quit,  AtlasWindow::OnQuit)
+	EVT_MENU(wxID_EXIT,  AtlasWindow::OnQuit)
 
 	EVT_MENU(wxID_UNDO, AtlasWindow::OnUndo)
 	EVT_MENU(wxID_REDO, AtlasWindow::OnRedo)
@@ -81,19 +81,19 @@ AtlasWindow::AtlasWindow(wxWindow* parent, const wxString& title, const wxSize&
 	wxMenu *menuFile = new wxMenu;
 	m_MenuBar->Append(menuFile, _("&File"));
 	{
-		menuFile->Append(ID_New, _("&New"));
+		menuFile->Append(wxID_NEW, _("&New\tCtrl+N"));
 //		menuFile->Append(ID_Import, _("&Import..."));
 //		menuFile->Append(ID_Export, _("&Export..."));
-		menuFile->Append(ID_Open, _("&Open..."));
-		menuFile->Append(ID_Save, _("&Save"));
-		menuFile->Append(ID_SaveAs, _("Save &As..."));
+		menuFile->Append(wxID_OPEN, _("&Open...\tCtrl+O"));
+		menuFile->Append(wxID_SAVE, _("&Save\tCtrl+S"));
+		menuFile->Append(wxID_SAVEAS, _("Save &As..."));
 		menuFile->AppendSeparator();//-----------
-		menuFile->Append(ID_Quit,   _("E&xit"));
+		menuFile->Append(wxID_EXIT,   _("E&xit"));
 		m_FileHistory.UseMenu(menuFile);//-------
 		m_FileHistory.AddFilesToMenu();
 	}
 
-	m_menuItem_Save = menuFile->FindItem(ID_Save); // remember this item, to let it be greyed out
+	m_menuItem_Save = menuFile->FindItem(wxID_SAVE); // remember this item, to let it be greyed out
 	wxASSERT(m_menuItem_Save);
 
 	wxMenu *menuEdit = new wxMenu;
diff --git a/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.h b/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.h
index 7958bef4b2..cca4f36469 100644
--- a/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.h
+++ b/source/tools/atlas/AtlasUI/CustomControls/Windows/AtlasWindow.h
@@ -20,16 +20,11 @@ public:
 
 	enum
 	{
-		ID_Quit = 1,
-		ID_New,
 		//	ID_Import,
 		//	ID_Export,
-		ID_Open,
-		ID_Save,
-		ID_SaveAs,
 
 		// First available ID for custom window-specific menu items
-		ID_Custom
+		ID_Custom = 1
 	};
 
 	AtlasWindow(wxWindow* parent, const wxString& title, const wxSize& size);
diff --git a/source/tools/atlas/GameInterface/Handlers/ObjectHandlers.cpp b/source/tools/atlas/GameInterface/Handlers/ObjectHandlers.cpp
index 10e68a4f8d..7e97edf580 100644
--- a/source/tools/atlas/GameInterface/Handlers/ObjectHandlers.cpp
+++ b/source/tools/atlas/GameInterface/Handlers/ObjectHandlers.cpp
@@ -19,6 +19,8 @@
 #include "ps/CLogger.h"
 #include "ps/Game.h"
 #include "ps/World.h"
+#include "renderer/Renderer.h"
+#include "renderer/WaterManager.h"
 #include "simulation/EntityTemplateCollection.h"
 #include "simulation/EntityTemplate.h"
 #include "simulation/Entity.h"
@@ -34,6 +36,18 @@ static bool SortObjectsList(const sObjectsListItem& a, const sObjectsListItem& b
 	return wcscmp(a.name.c_str(), b.name.c_str()) < 0;
 }
 
+static bool IsFloating(const CUnit* unit)
+{
+	if (! unit)
+		return false;
+
+	if (unit->GetEntity())
+		return (unit->GetEntity()->m_base->m_anchorType != L"Ground");
+	else
+		return unit->GetObject()->m_Base->m_Properties.m_FloatOnWater;
+}
+
+
 QUERYHANDLER(GetObjectsList)
 {
 	std::vector<sObjectsListItem> objects;
@@ -92,7 +106,11 @@ void AtlasRenderSelection()
 				bound.GetCentre(centre);
 				CVector3D a = (bound[0] - centre) * 1.1f + centre;
 				CVector3D b = (bound[1] - centre) * 1.1f + centre;
+
 				float h = g_Game->GetWorld()->GetTerrain()->getExactGroundLevel(centre.X, centre.Z);
+				if (IsFloating(unit))
+					h = std::max(h, g_Renderer.GetWaterManager()->m_WaterHeight);
+
 				glColor3f(0.8f, 0.8f, 0.8f);
 				glBegin(GL_LINE_LOOP);
 					glVertex3f(a.X, h, a.Z);
@@ -216,18 +234,21 @@ END_COMMAND(SetObjectSettings);
 
 static CUnit* g_PreviewUnit = NULL;
 static CStrW g_PreviewUnitID;
+static bool g_PreviewUnitFloating;
 
 // Returns roughly the largest number smaller than f (i.e. closer to zero)
+// (TODO: does this actually work correctly?)
 static float flt_minus_epsilon(float f)
 {
 	return f - (FLT_EPSILON * f);
 }
 
-static CVector3D GetUnitPos(const Position& pos)
+static CVector3D GetUnitPos(const Position& pos, bool floating)
 {
 	static CVector3D vec;
-	vec = pos.GetWorldSpace(vec); // if msg->pos is 'Unchanged', use the previous pos
+	vec = pos.GetWorldSpace(vec, floating); // if msg->pos is 'Unchanged', use the previous pos
 
+	// Check whether the position should be clamped to the edges of the world
 	float xOnMap = clamp(vec.X, 0.f, flt_minus_epsilon((g_Game->GetWorld()->GetTerrain()->GetVerticesPerSide()-1)*CELL_SIZE));
 	float zOnMap = clamp(vec.Z, 0.f, flt_minus_epsilon((g_Game->GetWorld()->GetTerrain()->GetVerticesPerSide()-1)*CELL_SIZE));
 	if (xOnMap != vec.X || zOnMap != vec.Z)
@@ -276,7 +297,7 @@ MESSAGEHANDLER(ObjectPreview)
 		CStrW name;
 		if (ParseObjectName(*msg->id, isEntity, name))
 		{
-			std::set<CStr8> selections; // TODO: get selections from user
+			std::set<CStr> selections; // TODO: get selections from user
 
 			// Create new unit
 			if (isEntity)
@@ -285,12 +306,14 @@ MESSAGEHANDLER(ObjectPreview)
 				if (base) // (ignore errors)
 				{
 					g_PreviewUnit = g_UnitMan.CreateUnit(base->m_actorName, NULL, selections);
+					g_PreviewUnitFloating = (base->m_anchorType != L"Ground");
 					// TODO: variations
 				}
 			}
 			else
 			{
 				g_PreviewUnit = g_UnitMan.CreateUnit(CStr(name), NULL, selections);
+				g_PreviewUnitFloating = IsFloating(g_PreviewUnit);
 			}
 		}
 
@@ -301,7 +324,7 @@ MESSAGEHANDLER(ObjectPreview)
 	{
 		// Update the unit's position and orientation:
 
-		CVector3D pos = GetUnitPos(msg->pos);
+		CVector3D pos = GetUnitPos(msg->pos, g_PreviewUnitFloating);
 
 		float s, c;
 
@@ -343,7 +366,7 @@ BEGIN_COMMAND(CreateObject)
 	{
 		// Calculate the position/orientation to create this unit with
 		
-		m_Pos = GetUnitPos(msg->pos);
+		m_Pos = GetUnitPos(msg->pos, false);
 
 		if (msg->usetarget)
 		{
@@ -372,7 +395,7 @@ BEGIN_COMMAND(CreateObject)
 		CStrW name;
 		if (ParseObjectName(*msg->id, isEntity, name))
 		{
-			std::set<CStr8> selections;
+			std::set<CStr> selections;
 
 			if (isEntity)
 			{
@@ -477,8 +500,13 @@ QUERYHANDLER(PickObject)
 		// object's model-centre, so that callers know the offset to use when
 		// working out the screen coordinates to move the object to.
 		// (TODO: http://trac.0ad.homeip.net/ticket/99)
+		
 		CVector3D centre = target->GetModel()->GetTransform().GetTranslation();
+
 		centre.Y = g_Game->GetWorld()->GetTerrain()->getExactGroundLevel(centre.X, centre.Z);
+		if (IsFloating(target))
+			centre.Y = std::max(centre.Y, g_Renderer.GetWaterManager()->m_WaterHeight);
+
 		float cx, cy;
 		g_Game->GetView()->GetCamera()->GetScreenCoordinates(centre, cx, cy);
 
@@ -501,6 +529,8 @@ BEGIN_COMMAND(MoveObject)
 		CUnit* unit = g_UnitMan.FindByID(msg->id);
 		if (! unit) return;
 
+		m_PosNew = GetUnitPos(msg->pos, IsFloating(unit));
+
 		if (unit->GetEntity())
 		{
 			m_PosOld = unit->GetEntity()->m_position;
@@ -511,8 +541,6 @@ BEGIN_COMMAND(MoveObject)
 			m_PosOld = m.GetTranslation();
 		}
 
-		m_PosNew = GetUnitPos(msg->pos);
-
 		SetPos(m_PosNew);
 	}
 
diff --git a/source/tools/atlas/GameInterface/Misc.cpp b/source/tools/atlas/GameInterface/Misc.cpp
index 6ff5d0b2f5..cb14318c75 100644
--- a/source/tools/atlas/GameInterface/Misc.cpp
+++ b/source/tools/atlas/GameInterface/Misc.cpp
@@ -8,7 +8,7 @@
 #include "ps/Game.h"
 #include "graphics/GameView.h"
 
-CVector3D AtlasMessage::Position::GetWorldSpace() const
+CVector3D AtlasMessage::Position::GetWorldSpace(bool floating) const
 {
 	switch (type)
 	{
@@ -17,7 +17,7 @@ CVector3D AtlasMessage::Position::GetWorldSpace() const
 		break;
 
 	case 1:
-		return g_Game->GetView()->GetCamera()->GetWorldCoordinates(type1.x, type1.y);
+		return g_Game->GetView()->GetCamera()->GetWorldCoordinates(type1.x, type1.y, floating);
 		break;
 
 	case 2:
@@ -31,7 +31,7 @@ CVector3D AtlasMessage::Position::GetWorldSpace() const
 	}
 }
 
-CVector3D AtlasMessage::Position::GetWorldSpace(float h) const
+CVector3D AtlasMessage::Position::GetWorldSpace(float h, bool floating) const
 {
 	switch (type)
 	{
@@ -39,11 +39,11 @@ CVector3D AtlasMessage::Position::GetWorldSpace(float h) const
 		return g_Game->GetView()->GetCamera()->GetWorldCoordinates(type1.x, type1.y, h);
 
 	default:
-		return GetWorldSpace();
+		return GetWorldSpace(floating);
 	}
 }
 
-CVector3D AtlasMessage::Position::GetWorldSpace(const CVector3D& prev) const
+CVector3D AtlasMessage::Position::GetWorldSpace(const CVector3D& prev, bool floating) const
 {
 	switch (type)
 	{
@@ -51,7 +51,7 @@ CVector3D AtlasMessage::Position::GetWorldSpace(const CVector3D& prev) const
 		return prev;
 
 	default:
-		return GetWorldSpace();
+		return GetWorldSpace(floating);
 	}
 }
 
diff --git a/source/tools/atlas/GameInterface/SharedTypes.h b/source/tools/atlas/GameInterface/SharedTypes.h
index b76a97f9ed..1d130e67bc 100644
--- a/source/tools/atlas/GameInterface/SharedTypes.h
+++ b/source/tools/atlas/GameInterface/SharedTypes.h
@@ -39,9 +39,9 @@ struct Position
 
 	// Only for use in the game, not the UI.
 	// Implementations in Misc.cpp.
-	CVector3D GetWorldSpace() const;
-	CVector3D GetWorldSpace(float h) const;
-	CVector3D GetWorldSpace(const CVector3D& prev) const;
+	CVector3D GetWorldSpace(bool floating = false) const;
+	CVector3D GetWorldSpace(float h, bool floating = false) const;
+	CVector3D GetWorldSpace(const CVector3D& prev, bool floating = false) const;
 	void GetScreenSpace(float& x, float& y) const;
 };
 SHAREABLE_STRUCT(Position);