Definately don't give up!!  You are just beginning and you are already tackling textures.  I didn't get near those for a long time. :)
Using terrains for waves is a good way to get what you want.  I would also suggest going to the terrain editor, by choosing 'E' after creating a terrain.  
Click 'New' in the editor to clear the default terrain.
 Click the arrow by 'Fractal'  Choose one of the many listed.  Click the circle by 'Fractal'.
A terrain will appear.  You can click again and a different version will appear.  You can click-hold the circle then slide right-left to see the terrain with different heights.

A great fractal to use is 'Pocked'  It is chaotic and looks good with a water texture.  
Try all the other buttons on the terrain editor, they can do some cool stuff.  

The crosshatched box on the right-side menu changes the terrain size.  It's good to have a high-res terrain nearest the camera, 1024x1024.  then use lower res farther away.  If your machine isn't a powerhouse don't go too big.