One easy way to make the droplets is to make a flat mesh and position it over the waterfall. Make a texture with small droplets and just have them move down. I will start my tutorial soon on how to do this. For now maybe this pictures helps you out.

- waterfall.jpg (48.36 KiB) Viewed 3243 times
I hope the image is clear. The waterfall is at the back. At the bottom there is a flat mesh to show the foam and ripple texture where the waterfall hits the water. Wrapped over it is the droplets mesh.
The droplets texture is really simple. Just some circular and oval dots spread out in different sizes. Do't use to much or it will look to gridlike. It should look random. By moving around the vertices in the wrapped grid you can influence how at certain places the droplets seem to go faster.
As you will notice in the screenshot below I also have small droplets in the actual water texture. The most realistic effect would acquire to have two wrapped droplet meshes to really accomodate different speeds. By having tiny droplets on the waterfall texture I kinda get the same effect with less objects and textures.
The ripples or foam at the bottom of the waterfall in my shell now only move to one side, towards the player. In Gira they move from the center to the outside. I haven't figured out how to do that yet. There is an alpha vertex paint layer to fade out the texture.
With textures:

- waterfall2.jpg (56.98 KiB) Viewed 3240 times