Nilbog does not mention obstacles like water, or lack of LOS.  I'm pretty sure the pathfinding code looks for the closest node with LOS and no obstacles, and plots a straight line (in 3D) to the next waypoint.  This is what causes the "hopping" some mobs are seen to exhibit:  The interpolated point is in the air, and gravity causes them to fall. 
 
I'll sometimes test a path by spawning a neutral mob, running to the other waypoint, and then using #damage to aggro the mob.  For extra tough spots, like Crescent Reach, I log a second character in and chase the mob as it runs from path node to path node. 
		
	
		
		
		
		
		
		
		
		
		
	
		
		
	
	
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