I'm not a graphics card engineer but... if its the 3D effect from an nVidia card then they use something called a displacement shader (I think that's what its called anyways
).
Basically there's an animated texture that is layered on the water textures and instead of being displayed as a texture on the surface it is used to calculate a 3D mesh using the shader engine on the card. It's layered with 2D textures to create the full 3D effect.
There may be a better more technical and more technically accurate description but that's how I understand it to work from a laymans perspective.