That is a good method. My Caisson method is actually pretty easy once it gets started. I use a door inside the structure to got out to the unfinished section and use pumpkins to light up the underwater areas until I can create an air pocket that I can place a torch in. Also it's a little less resource hungry than the ladder method. I use only dirt and the materials that the walls are made of (plus shovels and pickaxes). The end results are pretty good:
This is my underwater "farm". It's also designed as a junction area for expansion into other underwater rooms that I might decide to build.
The modding was both easy and difficult: The HD texture pack and the simpleColors lighting/map overlay both have installers which correctly modify the minecraft.jar file without any hitches. However, I've been trying to install a grass modification which would make grass actually 3D, but every time I put it into the java file, the game freezes up.
Does your server being "up" mean that we can start connecting to it if we PM our minecraft names?