A combination of Terragen and Photoshop - I made this one for my Grandma for Christmas because she loves the beach, and hardly ever gets to go there... [edit] I played around with the levels in photoshop a bit, and I think it turned out a bit better...
I like it very much, but I have a few tips. When you looks into the sun, objects between you and the sun tend to lose their details, you only see the silhouette. I think that is what you need to do with the two pieces of beach a bit higher up in your image. Darken them a bit to make them more realistic and to get some contrast in your picture.
Beautiful. I'm sure I've seen that place somewhere.. Then again, beaches - even ones like that - aren't so rare Nice job. Maybe some antialiasing wouldn't hurt. I haven't used Terragen much, so I have no idea how to enable it...