What are your requirements as an author, what's your world imposing on your characters?

I wanted characters to have the ability to live above the water as well as below it without any special physical changes. That's a lot for a reader to accept.

This is fantasy, so I can get away with saying something like, "living off the power of the sea" if I say it with enough solemnity, but that doesn't mean it's simply a hand wave and everything works.

Let's dive in:

Sound travels five times faster under the water than above it. Well and good, but it turns out that volume doesn't depend on the speed of sound, but rather on two things: what's called the "amplitude of sound waves" and--very importantly--on the capabilities of the listener. (Amplitude is basically the height of the sound wave, but let's don't get into that. Acoustics gets very technical and way past me very fast).

We're humans and we have ears on the sides of our heads, a sort of cone to focus the sound waves, and then we have eardrums and special bones in the middle ear that do the hearing.   This works well in the air.

In the ocean, mammals like dolphins have evolved over millions of years to rely on sound conduction through tissue and bone. It turns out that humans can do this as well--just not as well. As you know, we cannot hear an underwater sound while above the water--through the surface, but if we step into the waves up to our knees, suddenly we can. Not like cetaceans, but we have a limited ability to hear through our tissue and bones right out of the box. 

For hearing to really work--as good or better than cetaceans--for my Seaborn characters, they had to have some simple modifications to the jaw bone, a couple skull enhancements, but nothing that you or me would notice from the outside. Radiologists would freak! Readers can easily deal with minor mods.

Other weirdness in the water.

I have solutions for some of these, but if your characters are living in the sea, this is what they're going to have to deal with every day:

How far sound travels in water doesn't depend on how loud the sound is, but on tonality. Higher tonality sounds travel farther than lower tonality sounds. Pressure plays a significant role in speaking, singing, making noises underwater.

Navigating by sound is also a problem. Above the sea, you can close your eyes and find your way fairly easily just by listening--think of the Marco Polo game. You're blindfolded. You say "Marco." Players shout "Polo" off to your right. You turn in that direction to catch them. This works because sound travels slow enough in the air for your sense perception processing to calculate the difference between sound waves hitting your right ear before your left.

Underwater, things get a little fuzzy. Sound's traveling at five times the velocity of sound in air, and you can't tell where it's coming from simply by the difference in the rate it hits your ears. I do think having highly developed bone and tissue audio conductivity helps with this, but not certain.

Let's pretend that you can live underwater. Everything works--lungs, sight, hearing--and it's all going along swimmingly. The oceans are complex environments, with uniformity extending only so far. You won't be living on a plane--the surface of the earth, but in 3D space, hydrospace, and you could find yourself swimming between different sea consistencies, along currents, into water colder than ice, hotter than boiling water. It's a wild world down there.

And interfaces make listening a bitch. Sound bounces off the surface above you if you're in shallow water, reflecting it back at you, producing echoes, dead spots, and other anomalies. Then there are thermoclines, layers of differing temperature in the sea that also affect the way sound travels. Colder water is denser, which changes sound behavior when it hits or passes through one layer to another. In some cases the layer of warmer and colder water can be as audibly distinct as the interface between the sea's surface and the air. The ocean itself is a world of separate layered worlds.

I hope this enough to get things going.

Hearing seemed the clear one to start with, but there are many underwater paths to swim down after hearing. There are obvious ones, like seeing in total darkness--how does that work?-- and breathing a medium as thick as seawater, and not so obvious ones like eating or handling ingrained things like circadian rhythm. Some other post!

LINKS:
http://library.thinkquest.org/28170/36.html
http://www.pmel.noaa.gov/vents/acoustics/tutorial/tutorial.html
http://news.nationalgeographic.com/news/2004/08/0811_040811_whale_evolution.html