From my experience, the best and only conviencing way to achieve waterfalls is to paint them in in the postwork phase of your art creation. Go to the marketplace and look for photoshop brushes. There you will find waterfall brushes that you can paint onto your image. It requires just a little effort but the effects are absolutely wonderful. Good luck.

Check out Forester's store, and her waterfall objects at ExpandingWave.com.  She does great water objects. 

They are also available from Cornucopia3D.  

Lin

Look in the tutorial section  here at renderosity and look for lilzeek tutorial for waterfalls in vue.
  He uses alpha planes and they make a nice waterfall.
At one time these alpha planes were for sale.   Contact him if you like what you see in the tutorials.

I agree with garyandcatherine here, I've never yet seen a convincing waterfall effect done in Vue itself.

Check out Raptura's brushes in the marketplace here - at $5 for 30 brushes they are very good value for money.

Attached Link: http://www.renderosity.com/viewed.ez?galleryid=1137804&Start=1&Artist=GSGALAXY&ByArtist=Yes

Just a little while ago i've tried to set up a waterfall scene (cascade style) myself, completely done in Vue 5 - no postwork - no alpha planes - result see the attached picture - really hard to get close to a real looking waterfall ...
I've just started with Vue 5 in Oct 2005 ... i guess, i have to try the alpha plane idea, too ...

Your waterfall really looks pretty good, odeathoflife. For waterfalls, I'd recommend two things to you. First, try the Troubled Water material, if you weren't already doing so. Second, I don't have a copy of Easel, but in its Material Editor, can you adjust the angle of incidence of the reflected light. I get some reasonable results when I make the angle of incidence very low. This tends to make the white part of the reflection occur earlier, and it looks more like white foam that way. I wonder if I can create a "foam" bitmap that we call could use for this. Walks out of room for a little bit.....

Thanks for all the tips and comments.

gary and catherine - I don't do post work :) well not ever but very rarly, I can't paint on a computer no matter how hard I try, it always looks muddy.

I will check out the incidence though sounds promising.