About 12 years ago I tried out a demo of a really cool underwater side scroller. You control a yellow submarine and in between missions you purchased weapon upgrades and such. Really good graphics (2D with pre-rendered "3D" sprites) and equally good gameplay. I've been searching for this game for quite some time now, but haven't been successful at all. If anyone got a clue to what game I'm talking about, please help me find this forgotten jewel! =)

Any idea on the company who made it??? Or any other specifics on the game???

What system was it on?
Karl

"Stargunner" but not submarine or "In the Hunt" ? And lastly "In Search of Dr. Riptide" ?

I'm afraid not. It's been so long I only remember REALLY liking it at the time. =P
I played the demo on PC, don't know if it was released on other platforms. The demo was on a CD that came along with a Norwegian gaming/scene mag called "Techno".

Sub Culture?

When I read the description the first thing that came to mind was Sub Culture too. That demo was awesome.

I think they might be right :)
Clicky clicky

sub culture was yellow (rusty) sub too, but was in 3D, but Dr. Riptide was 2D yellow sub in 2D world, i bet on Dr. Riptide.
dr riptide - http://takegame.com/arcade/htm/riptide.htm

Archimedean Dynasty (Schleichfahrt)
12 years ago - check
underwater - check
good graphics - check
upgrading etc - check
But it wasn't side scrolling, you had different submarines etc., so i doubt you are talking about it. Still, better safe then sorry.