I think that you only have a ground plane in your scene... which automatically spreads all the way to the horizon and you're changing the material to be land or water? You need to make this plane watery for the ocean and create a terrain for the land. Click on the mountain shape in the "Create" palette to create one. Now editing this by pressing the E will open up the terrain editor where you can fiddle about to make dunes or whatever you need. You will need to resize it for your scene... use the edit menu for this. If you have any other probs please post them 'cos we love newbies! May I thoroughly recommed the various tutorials on this site and around the web. Good luck:)