Hi, I have found it significantly easier to set up the 2 environments and render them separately, then combine them in a compositing application.
There are many methods that have been used for waves on beach...you could set up a specialized shader... or animated planes that draw up and down the beach with waveEdge textures that fade in and out...or create a nurbs loft from curves and animate the curve edges to simulate the water edge. You could even emit particles/sprites from this curve for extra detail...or you could use RealFlow or similar product (but this is a HEAVY solution)...or...many ways to skin the cat...