If you are on an island surrounded by water in the public version waypoints go nuts. Try with a blank level and no water to confirm they work for you, then work out from there. The latest build fixes this BTW
PC SPECS: Windows 7 Ultimate 64-bit, Intel Core i7 920 (PASSMARK:5008), NVIDIA Geforce 9600 GT GPU (PASSMARK:752) , 6GB RAM