The water in this scene is made up of two polygons: one for the basic water surface with no reflection, and the other for the fresnel effect with the reflections and stuff. The fresnel polygon is placed 1 cm above the other one. They are both huge MegaMeter squares. They have exactly the same bump map, but the fresnel has Transparent Edges turned on. Remember to turn on Trace Reflections to catch the clouds reflecting in the water. That's actually the main reason why it looks real. Also, there is a gradient effect under the water which is most effective with Trace Refractions turned on.
Water Surface:
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Fresnel Surface:
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There's only one real problems with the water in this image. The straight edge where the box meets the water should be ripply. A displacement map would fix this, but would require many more polygons. If you were to use more than one polygon, Smoothing should be turned ON.
NOTE: a cooler and more versatile way to do this is to use Prem's Surface Effectors. You can learn more about that on the Lightwave newsgroups.