I have seen lots built over neighburhood water, such as here: http://modthesims2.com/showthread.php?t=197763. Could anyone tell me how this is done?

Thanks in advance!

Had you read these threads ?
http://www.modthesims2.com/showthread.php?t=184564
http://www.modthesims2.com/showthread.php?t=107988

If they are not suficient dont hesitate to repost your question

no, I had not, thank you very much.

That first thread is an excellent explanation- here are 4 things to keep in mind:

1) Be sure the empty lot is placed on a sloping terrain in such a way that the back edge of the lot is *below street level.*

2) When you place the finished lot near the ocean, you need to be able to get it in close enough to the water for it to work (generally, sometimes it works anyway and sometimes not), and make sure you've placed it in a shallow section of the neighborhood where the lower part of the lot will be below sea level. Even if it is not touching the shoreline, if the lot is close enough to the water (and deep enough), it will bend the surrounding terrain to create a little inlet.

3) Your basement will flood. If you think about it, it makes sense. Houses on the ocean have to be above the water level! When I make these houses, I make sure to raise the house up a little bit and not build any floors below the street level.

4) The ocean/river water won't "flow" from one lot to another unless they have the same slope and are placed very carefully- if the edges don't line up correctly, it won't work.

Have fun!

Just a linkage for related infos:
NL: Neighborhood Water Flowing onto Residential Lots [initiated. by Ellatrue]
http://www.modthesims2.com/showthread.php?t=107988
How To Build An Island In 5 Easy Steps [by eedgan]
http://www.modthesims2.com/showthread.php?t=184564
Lots on water
http://www.modthesims2.com/showthread.php?t=198261