Ok, that's because you're not doing it right most likely.
First take a waveset plane and retopo it to your age--learn more about this in the blender wiki. Then, with it retopoed put the object center where you want the water-surface to be (make sure there is wave-surface geometry UNDER the water-line). If this is not enough, Nadnerb promised a tutorial soon.
EDIT: 'Dox, you said just what I said.
I posted at the same time as you and didn't see your post.
Currently getting some ink on my hands over at the Guild Of Ink-Makers (PyPRP2).