TuanNA,
There are many ways to do it. The first thing you want to do is pick the base, I personally use a wooden board most of the time. It's just easy and cheap to acquire. Some people use Styrofoam. Then, plan your layout (will it be just the ship and water, do you want a pier or another ship, boat, etc.). You also need to figure out what material you want to use for the water. Lots of people use acrylic gel medium. I personally like clear silicone caulk (like you use for a bathroom). It's really dependent upon what you have available.
Figure out where you are going to put the ship, paint the under color (some shade of blue), mount the ship, and then apply whatever you want for the water. Once the material is completely applied and dry you may want to do some touch-up on top in lighter shades of blue, blue-green, and even white to represent foam.
If you look around the internet for ship dioramas, you can find plenty of step by step tutorials with pictures.
Your model looks fantastic. How did you get the light streaking on the sides?
Groot