When a Water object is added to the Vue scene, it will be in a staic form without any animation applied to its surface. If you would like to have the water surface animated, then we have to enable its Displaced Water Surface property. This property allows the waves at the surface to be converted to true geometry that can be animated.
To enable this property, Right-click the water object and choose Edit Object option. Under the Geometry options, check the Displaced Water Surface option. You can optionally edit the altitude function of the waves by clicking the Edit Function button. The Wind direction setting controls the direction of the wind, as seen from above (the azimuth). Setting it to zero will make the wind blow from left to right in the Top view and hence the waves of the water surface will also be moving from left to right. Setting it to 90 will make the wind blow from top to bottom in the Top view, making the waves move from top to bottom accordingly. Set the value to your liking and close the dialog box. Now your water object is animation ready.
But, you should be having more than one frame in your scene timeline to actually see the animation and have it rendered out. An easy way of doing this is by clicking on the Timeline icon on the toolbar and selecting the Set Animation End from the Timeline popup menu. (You can close the Animation Wizard if it appears.) The Set Animation End option allows you to drag the animation endtime to set a duration for the animation. Once you have a reasonable length set, click on the Generate Preview icon to the right of the Timeline to generate a preview. The Render Animation icon next to it allows the actual animation to be rendered out with the applied settings.
Tweak these settings and have fun with your water surface.