I received this book at our honeymoon, and years ago I read Jensen's A Language Older Than Words, which I found interesting but not entirely convincing. I suppose that's true in a certain way with Walking on Water, though I liked it much better, on the whole.
The center of this book is Jensen's experiences teaching creative writing at Eastern Washington University and at a prison--in many ways, we could see this book as primarily about teaching creative writing and about writing itself. Around this center, he critiques education as it's often executed (echoing in many ways John Taylor Gatto), and certainly that informs his views on teaching.
In short, he finds education to be a stifling exercise in beating down the creativity, individuality, and independence of students, and he reacts against this by encouraging all of these things. He implements a grading system based as simply as possible on effort, refusing to grade his students' writing. Even in his critiques of their pieces, he focuses on praising and encouraging the writer's strengths rather than criticizing the perceived faults. Much of his class, however, isn't about writing--it's about discovering the self, interrogating the self, pondering the world, as students get to know themselves and each other.
There's a good deal in this book that's challenging to conventional understandings of education, and as such it's difficult to accept it entirely, but also impossible for me to dismiss out of hand. Jensen has important things to say about education, not just about creative writing.