Wireless sensor networks are deployed in different regions of interest, and used in many applications such as surveillance and telemedicine. Advancements in wireless communication technology and miniaturization of electronic devices have led to sensors nodes which can be deployed in different terrains such as underwater with acoustic sensing functionality. However, non-ideal channel conditions in such terrains can affect the sensor network performance. In this thesis, the chaos modulation schemes are shown to perform better than conventional Direct Sequence Spread Spectrum in propagation delay channels because they employ non-coherent demodulators. Furthermore, since propagation delay is rampant in the underwater environment, an integrated simulation framework is used to evaluate the network level performance with choice of modulation scheme in the underwater environment. Ergodic Chaos Parameter Modulation scheme performs best and thus proposed for use in underwater acoustic localization using wireless acoustic sensor networks.