The first thing of note is that when the player hits the water, her combat skills change just as if she had switched weapons. And just like switching a weapon, the toolbar change happens fluidly and automatically without the player actively having to switch out skills.
As for how you can breathe underwater, Guildcast says in the write-up, "As soon as you're fully submerged, a small breathing apparatus appears over your character's face and you can stay under indefinitely. That's it. No muss, no fuss, no 'find this potion, drink it, and you have ten minutes.'" It can't get any easier than that.
Swim over the Guildcast site for the full impressions of underwater exploration in GW2 and be sure to check out the full gallery of images as well. Let us know what you think. Does Guild Wars 2 truly break all the conventions?
[Update: The official GW2 site now offers a post by ANet game designer Jonathan Sharp that goes into even more "depth" (pun intended) on underwater combat!]