An all white alpha channel is not so good for blending textures together, but if you just want to fade it out I think it may be good 
The alpha channel i’ve used below is just a brightened copy of the rgb image.
textures/neotic_skies/water_fade
{
qer_editorimage textures/neotic/red_water.tga
qer_trans .5
q3map_forcemeta
q3map_nolightmap
surfaceparm nonsolid
surfaceparm nomarks
surfaceparm trans
q3map_tcgen ivector ( 256 0 0 ) ( 0 256 0 )
deformVertexes wave 10 sin 0 2 0 .5
surfaceparm water
nopicmip
cull disable // uncomment to debug
polygonoffset
{
map textures/neotic/water_with_bright_alpha_channel.tga
blendFunc GL_SRC_ALPHA GL_ONE_MINUS_SRC_ALPHA
rgbgen vertex
alphagen oneminusvertex // inverses the value of the volume alpha
alphafunc LT128
}
}
That should do it hopefully 
All you need to do is create a largish water brush (the larger the brush, the wider the blend) and apply the above shader to the surface. Then create an Alpha_0 brush on the two vertexes which are furthest away from the maps edge. If you want to do a corner piece, you need to use multiple Alpha mod brushes. Alpha_0 on the inside corner, and Alpha_25, _50, or even _75 on the two corners adjacent to the _0.
Plus, with these, if you’re just blending to nothing, there is no need to overlay them on anything, just treat them as normal water brushes. Also, you may need to use nodrawwater on the sides of the brush if you’re going to attach them to other piece of water.
Edit:
Sorry, i’ve just tried doing a few test maps with this and can’t seem to get as smooth a blend as i’d hoped. It’s being a bit of a bitch 
Ydnar, is the blending in the alpha mods done with a gradient style formula or is it done manually from one edge to another? What I mean is, is it possible to have q3map_alphamod scale <any number> or is it just limited to 0, 25, 50, and 75?
[Edit 2]
Ho kay!..
Right…
I’ve played round with it some more and altered the shader above, note the alphaFunc GE128 is now alphaFunc LT128. I’m not too sure on the mechanics of the differences in the GE or LT, but the LT seems to give a better fade out. Fortunately the blending looks very nice now… Unfortunately though it’s the other side that’s giving me problems, I can’t seem to quite match it up with another body of water as shown in the below screenshots. (I hope you can make them out…)
This shows what happens with the alphamod_0

This shows what happens with the alphamod_25

For some reason, the alphamod_0 wants to blend both sides of the water body. So… to bring that back a bit I used the alphamod_25. However, that makes the water more translucent and so the colour doesn’t match up. So… I tried an in-between value, alphamod_10, but for some reason that just makes the whole water disappear (ydnar, that’s my reasoning for the question about the alphamods in edit 1).
I tried darkening the water image for the alphamod_25, but I soon realized the colour was fine and it was just the opacity of it. So… I lightened the alpha channel, this gave the same results as i’d used alphamod_0, which I suppose would be expected.
Also, it seems if you try to overlap an alphamod affected texture with another texture which has an alpha channel, but not necessarily alphamodded, then the alphamod gets confused and sets the vertexes it contains to invisible, which is why I think it could be a good idea to make it so that you have to func_group the alphamods, it would save much trouble and then you would be able to overlap these alphamodded brushes without worry that one would affect another. I could be wrong about that though, I need to do some more testing… 
[/Edit 2]
[Edit 3]
Reading through my post again, it seems as if I should try to reduce the opacity of the water body i’m trying to link to. This would probably work, but it could also cause knock on effects, i.e. i’d have to change the opacity of the foam aswell. Although that may be the way to do it. I’ll post again the results of that once i’ve tried it 
Hope this is helping people, sorry for all the talk about how I went about doing things, just thought you may want to know.
[/Edit 3]