| EUREKA! I'VE GOT IT! Man that was a long search. It's simple....|
The water system is a system, like a space warp. So you create a plane that is the same size as the water, and click 'BIND TO SPACE WARP', and bind it to the water system. The mesh then deforms just as the water system does, and the mesh is fully renderable of course.
Cool. By the way, you all have got to check out Reactor if you have not. Such beautiful effects you can set up like wind blowing and a piece of cloth that falls to the floor and blows across the floor due to the wind, and deforms just like cloth does. Very realistic looking effects!!!