Just to make things clear, actually it is rendered within the terrain pixel-shader, very much like a fog effect.
It was my fault to mention the screen-space water and not to make it clear that my version is trying to "emulate" the screen-space water, but I'm not using a fullscreen quad.
For every pixel below the water plane, I cast rays from there to the eye position, intersecting with the water plane. Then, based on that distance, I determine the transparency at that pixel.
I made some further tests, and for the game that I'm currently making, it will fit nicely. What I really like about this water is that it is being really quick to implement, and does not add a single vertex to the batch.
EDIT: After some more tests, I am aborting my implementation of this technique, and returning to the water grid approach! I will keep the ray casting though, as I guess that was what really impressed me...