The units are usually whatever units your data frame is in, so if you are in inches, and we are talking a large waterbody, it might need to be a pretty large edge length, though you can change your data frame units. You can do a Tin Edge conversion to convert your tin to lines and measure some of your lines to check about what length to use. Also, if these are internal watebodies, lake, pond, etc, you will need to the ALL Method, so it check the length of all lines, not just ones on the perimeter which is more for coastlines, where only one side of the map really needs to be cut out.