We have a window in our 1960's era shower. It is wood and while the casement window itself is not rotting, the wood trim around the window is in terrible condition.

We are gutting the bathroom in less than two weeks and after much research, we're purchased a vinyl double hung window with tempered privacy glass as a replacement. Our house is brick and there is really no way to nicely close up the window, plus it does allow a lot of light. This window seemed to be the wisest choice since it has no wood whatsoever.

Our tile installer will be waterproofing the walls and tiling all the way up to and covering the window flange, and then installing a marble sill at an angle to allow water to run back into the shower.

It's not a perfect situation to have a window in a shower, but this was the best solution we could come up with.

We used an Integrity by Marvin windows. The windows are all fiberglass construction(in and out) and we had it done awning style to open while showering. We will trim it out with tile and hope for the best. This is on the long wall of a 60x70 inch shower so will not take brunt force of water.
You could alwas use glass block it can be pretty cool and contemporary looking.

You've got 5 options, in order of expense, all DIY with no labor under consideration for expense. 1. All vinyl window, flashed properly and waterproofed properly on the interior plane. 2. Acrylic block window, same waterproofing. 3. Glass block, ditto the flashing and waterproofing. 4. Close up the window. 5. All fiberglass, same with the waterproofing systems.

If you have to pay labor, the expense level goes up, as does the order of the cheapest to most expensive. Glass block is more labor intensive and might be the same or more as fiberglass.