This bug is only visible with mipmapping and anisotropic filtering on max settings. This happens on both nvidia (gtx285) and amd/ati (hd5650) graphic cards. Both with latest drivers.
1.5.1pre fixed the performance issues for me, the particle rendering/layering bug is still there though. 😞
This still happens in the release version of 1.5 (should be the same as the 1.5pre).
@ Rickard Ã…berg: Sorry, your right. I just checked my enchantment table and I also see random black letters popping up. This might be related to the torch bug, but I only see those letters at the enchantment table, where there "should be". Not like the torches everywere around.
@ Rickard Åberg: I am using the 1.4.5 pre with Jasons fix and it works just fine. 🙂 Never seen any misplaced particles of any kind with his patch.
I really like the way mojang tries to polish the game without adding new features, but I cant understand why they release a official version with such an annoying bug. I would rather wait for a 1.4.5...
@Dan
Good to see that there are people that notice that bug too, seems that most of the others dont even bother? Since the merge of mp and sp, the render distance was never really "Far" as it was in 1.2.5. Now in 1.7.2 its even more ridiculous... If I find the time i will try to make a comparison from 1.2.5 on "Far" to 1.7.2 on max render distance.