If you're an aquatic elf, I assume your "book" would be written on shells or something of the sort. As for verbal components, I don't see why not. If you can breathe underwater, you can speak underwater. I'd probably make an air-breathing wizard, without any kind of magical assistance, make a Concentration check or something to do verbal components underwater.
By the by, if you're a half-aquatic elf, check out the water adaptation feat in Races of Faerun. You get your full base speed as a swim speed and can breathe water and air with equal ease.
By the by, if you're a half-aquatic elf, check out the water adaptation feat in Races of Faerun. You get your full base speed as a swim speed and can breathe water and air with equal ease.