I would like to contradict this statement, although I don't think it would be nearly as effecient or easy, I think you could do this water effect without a shader. What I mean by this, is if you want the water + wave effect, you could make a terrian with a moving texture assigned to it for the water and then script in the vertexes to move as you would like. The most basic form of this is just random movements on the z axis at small intervales, the most complicated you would have to set disturbances along your water at a few points and then use a bouancy effect that effects each vertex according to the vertexes around it, again moving along the z axis only. I think the actual water effect should be quite simple and could be modified depeding on what you want to achieve. The simplest you would need to assign a portal (sorry I'm not sure if portals that create a mirror are supported by your or all video cards, but I don't think it should because if you do it manually, it would be the equivalent of a dynamic camera view on a surface), and then if you wanted more than a simple mirror water effect you could assign an alpha value (again if you wanted to be complicated about it, you could assign farther away sections to a more visible alpha value), and finally make a static or dynamic texture and assign it to it if you so choose.

As I'm sure you can tell, each one of these steps you would have to take are significantly harder than just assigning a shader to your water, but then again, this is the price for a more hands on/less expensive, (and argueably better looking, and appropriate behaving) water effect.