There's a big difference between "waves" - which TG2 can already do quite well - and *breaking waves*, which no off-the-shelf program, including games, does at all, or at least very well. DT, you say you were studying the waves in Guild Wars and other games, but none of them do breaking waves as far as I know, and the regular wave shapes they can do are generally quite possible and in fact can usually be done much better in TG2.
You can use any procedural or even a heightfield to create water shape. In fact one might start a breaking wave study by creating a sort of sawtooth heightfield and then displacing it in TG2 horizontally. Without transparency you're going to find the results fairly lacking, but you *may* be able to use very carefully tuned height-based texturing (with lighter blues for higher altitudes) to simulate both transparency and foam. With enough effort I think you'd get an acceptable result, but it would be pretty finnicky, not easily applicable to other scenes, and certainly not animatable. Perhaps a breaking wave function will be added later, but I wouldn't expect it for the initial release of TG2.
- Oshyan