Tidal turbines were created using the notion that any fluid can be used to spin turbine blades. Engineers and researchers realized that turbines could be placed such that water flowed through them and turned the blades. If the turbine was placed in a spot where water naturally flowed through them and turned the blades, then the turbines could create a seemingly free supply of power. The four main components of a tidal power generation plant will be subsequently discussed. These components (as shown in Figure 1) are a tidal basin, a tidal barrage, sluice gates, and the tidal turbines themselves.
http://www.engr.utexas.edu/uer/tidal/tfigure_2.jpeg

The first component of a tidal power generation plant is a tidal basin, or estuary. Finding a proper site containing an estuary is essential for the successful operation of a tidal power generation plant. One must note that the estuary will not be man-made; rather, the tidal basin will be a geographical feature that is not easily replicated. A suitable estuary is typically a large body of water that is almost entirely surrounded by land with a small opening to the sea. The amount of power that a tidal power generation plant can produce is proportional to the size of the estuary (Taylor 1982). Therefore, increasing estuary size can increase power output. The reader must note that there are limits to the size of the estuary.

read the rest here. :)

http://www.engr.utexas.edu/uer/tidal/body.htm

a prime exemple:Rance powerplant

http://membres.lycos.fr/larance/images/Rancegenerale.jpg

This is a VERY interesting development in alternative power. I'd love to see this looked into further. Why not harness the power of the ocean?

There was a canadian company that called it the 'sea mill' because their design was much like an underwater windmill.

My only caution would be, how does this effect the oceanic life?

For a lot of the 'passive' systems, I wouldn't think it would make much of a difference on sealife. Most animals aren't within the top 20 feet or so of ocean water as it is.