In air, sound waves travel at a speed of about 767 miles per hour (or 343 meters per second). In fresh water, they travel at about 3315 miles per hour (or 1497 meters per second).

Sound is transmitted as a pressure wave. One molecule collides with a second molecule, setting the second molecule in motion. The second molecule collides with a third molecule, setting it in motion, and so forth. The closer the molecules are together, the shorter the distance a molecule must travel before colliding with another molecule and passing the sound wave on. The shorter the distance between molecules, the more quickly they are able to transmit a sound wave. As water molecules are closer together than air molecules, they transmit sound waves more quickly.

More Info: scuba.about.com