You can't do it the old way you did it in AH2. Which was to just drop files into the texsrc directory of the terrain. Add files like:
- wntt0001.bmp
- wntt0002.bmp
- Etc.
Currently when I tried just dropping the files in like we used to do in AH2 I still just get the land terrains. Not sure if this is something you still can do or not ... it might be possible if you built an actual tileset.
Also the water basically is only transparent down to -9 (feet) elevation.