@baltoro: He drowns him. Wolverine still needs to breath.
Wolverine can stay underwater for a long time. He'll just slash out of the water bubble or whatever low level water techniques Zabuza uses. Just because Zabuza can trap Naruto and Sakura (probably like 10-12 years old each) in beginning of series doesn't mean he'll hold Wolvie with it. He needs a way stronger cage to hold a real animal like Wolvie.
The water prison technique - once trapped the target is unable to move while within it due to the heaviness of the water.
the density of the water is extremely increased which causes it to be almost impenetrable unless you can disrupt the flow of chakra, which you would have to be able to use the gentle fist or get the user to stop, Also it wasn't naruto and sakura trapped, it was Kakashi who was trapped in the water prison.