The ship is surrounded by water to give an illusion of the sea. At the entrance, the visitors are issued a boarding card with name of actual passenger of the ship. Finally at the end of the trip, in the Memorial room, they come to know the fate of the passenger whose name is on the boarding card whether he/she was lucky enough to survive or was one of the unlucky one who died in the icy water on April 14/15, 1912.
The museum opened in 2006 is reportedly largest of its kind the World.
Image Source: Google Map and Street View
Image from Flickr is by rachel a. k.
The Grand Staircase
Image from Panoramio is by L K Kelley
Glass dome above The Grand Staircase
Image from Flickr is by smiley4554
Main source of info: Wikipedia
Link to a great set of images from inside of the Titanic Museum by L K Kelley
View location in Google Earth / Google Map and Street View