We lived in Malawi for a while and have snorkeled off Likoma Island once (beautiful cichlids but not much else to see). Cannot comment on snorkeling other places in the lake or diving)
The lake is beautiful but it does have bilharzia. Treatment (1 dose, by weight) is available in pharmacies in Malawi.
On Likoma Island we stayed at Mango Drift and splurged on 1 night on the honeymoon island at Kaya Mawa - great memories from both. This was in 2007 so not sure what is available today.
Happy to answer any more questions about Malawi - we loved living there.
(we will be traveling soon so answers may be a bit slow).
Karin.