Lots of truths and half truths and misunderstanding here
Wikipedia, Tide has an excellent piece that explains all.
For those that don't like to surf, here's the pith of it
"The ocean's surface is closely approximated by an equipotential surface, (ignoring ocean currents) which is commonly referred to as the geoid. Since the gravitational force is equal to the gradient of the potential, there are no tangential forces on such a surface, and the ocean surface is thus in gravitational equilibrium. Now consider the effect of external, massive bodies such as the Moon and Sun. These bodies have strong gravitational fields that diminish with distance in space and which act to alter the shape of an equipotential surface on the Earth. Gravitational forces follow an inverse-square law (force is inversely proportional to the square of the distance), but tidal forces are inversely proportional to the cube of the distance. The ocean surface moves to adjust to changing tidal equipotential, tending to rise when the tidal potential is high, the part of the Earth nearest the Moon, and the farthest part. When the tidal equipotential changes, the ocean surface is no longer aligned with it, so that the apparent direction of the vertical shifts. The surface then experiences a down slope, in the direction that the equipotential has risen."