It actually was really interesting. He kept harping on me for over-pronouncing the "sh" sound, but when I would use just an "s" sound, he'd say that was wrong, too!
I guess it's somewhere in between.
My friend is from Northern China, and said that he speaks with a somewhat different dialect. He said "shui" will commonly sound like "shwee" (but not so hard on the "ee") whereas he pronounces it more as "sway" (also, lighter on the "sh" sound).
Well, in Mandarin, you can either say it with an 'sh' sound but
with your tongue curled back to the top of your mouth, or you can just say it like most Chinese people I know, and use just a straight s sound. sh without the tongue curled back is 'x', not 'sh'. Southerners tend to transpose ch with c, zh with z, and sh with s. I say it the improper way, because I get made fun of by my wife if I say it "properly".
To my ears, it's usually closer to 'sway' than 'shwee', though some people will be more towards one or the other.
The tones are important also; shui is third tone, so start in the middle, go down, and then go up, and it will be drawn out a little more (time-wise) than if it were in second tone, for example. Xian is first tone, so it will be a high flat tone.
You can click the 'listen' button here to hear female and male voices say it.
http://www.nciku.com/search/zh/detail/% ... B%99/39460