ingredients

1x terrain with mediterrainian hills mat or something similair

1x water plane with caribbean resort mat

1x cloud plain with incoming sunset mat.

First off the sky really will affect how this looks especially the position of the sun. so it may take a bit of messin around with these settings to get what you want. Generally though a bright blue sky with little or no cloud cover and haze color ranging through white to light blue or grey will get the kind of results you want.

As for the objects place the terrain completly underwater and make it quite large. Place the water plane right on top of the cloud plane. Now enter the materials lab for the cloud mat and change these settings (see below for screen capture).You may want to also try rotating the cloud plane afterward to get the effect you want.

Cheers

Joe

I use a similar trick to make pond bottoms or deep water textures.  Works great but hell on render times. ;c)

 MDB

Attached Link: The Keep

Yes similair, I did'nt actually use the cloud plain technique on that one but have for past images.