The other things you describe—man, you're evidently trying all these things without even understanding basics of how the graphics textures go together. For example, the "reflects the wall once, and then it repeats some blue background, both above the rim wall and below it" comes from the fact that you have the Upper Sky turned on. That's it. The blue background is the upper sky. The Lower Sky is the sky.png texture, which, if given an alpha layer, can show through to the upper sky. The lower sky is the one that can move around. All of that can be reflected in the floor.
(Control of the lower sky texture partially overlaps with that of the floor. It is enabled with System Setup > Display Settings > Detail Settings > "Floor Texture." If the floor texture is off, so is the lower sky. You can turn off the sky under "Preferences" (see below) while using the floor; or have the sky on, but turn off the floor at "Floor Detail.")
And, again, "it doesnt work correctly as the last top and bottom pixels are stretched" is because you have RIM_WALL_WRAP_Y set to 0. Set it to 1 and it'll repeat upward (and downward); although, again, this only happens with textures, not the moviepack. I already told you this. I, and others, also told you to turn both the sky textures off.
So, look, since I already went through the trouble, here's a series of screenshots of the aforementioned reflection effect. I made 15. Grrrr. This was very annoying. The forum has an upload limit of 2MB, and PNG's apparently don't compress.

How each was created
All:
For the various views, I'm using different cameras. I also used different floors, to make evident the plane where the walls are mirrored.SP_SIZE_FACTOR -5
RIM_WALL_STRETCH_X 50
RIM_WALL_STRETCH_Y 50
RIM_WALL_WRAP_Y 1
FLOOR_RED 0
FLOOR_GREEN 0.7
FLOOR_BLUE 0
System Setup > Display Settings > Preferences >
Lower Sky: Off
Upper Sky: Off
High Rim: On
[All HUD Settings: Off]
System Setup > Display Settings > Detail Settings >
Object Textures: Mipmap Trilinear
Wall Textures: Mipmap Trilinear
Floor Texture: Off
Alpha Blending: On *
Floor Mirror: Everything!
* Only necessary for screenshots 3, 13, 15
screenshot_1 - Floor Detail: No Floor (FLOOR_DETAIL 0); Smart Camera, beginning of a round
screenshot_2 - Floor Detail: Just Grid (FLOOR_DETAIL 1); ", "
screenshot_3 - Floor Detail: Textured Plane (FLOOR_DETAIL 2); ", "
screenshot_4 - Floor Detail: No Floor; Smart Camera, just snapped the screenshot as the camera passed over (I'm guessing this may be what Raddakar did)
screenshot_5 - Same as #4
screenshot_6, 7, 8 - Same as #4, but with "Just Grid" as floor detail
screenshot_9 - Internal Camera; "Just Grid"
screenshot_10 - Same as #9, but I used either look or move down to tilt the camera downward; notice the grid plane of the floor
screenshot_11 - Same cycle location as the previous two, but using Custom Cam configured to an overhead view
screenshot_12 - Custom Cam set to overhead view, drove around; notice in this view the cycle will always cover the little black square seen in the earlier screenshots
screenshot_13 - More with overhead view, "Textured Plane" floor detail
screenshot_14 - Increased CAMERA_CUSTOM_RISE; "No Floor," showing the actual rim wall compared to the reflections below
screenshot_15 - "Textured Plane;" FLOOR_MIRROR_INT 0.5 to increase the mirror intensity (default is 0.1)
Now, you can try these with different sky and floor textures and combinations.