Ok this how you do it.
you have to be familiar with a water block (see below) to make a waterfall.
step one, first make your water block
step two, make the height taller and add a water fall texture, example cfalls1
step three, finished!
water block, this is the most common blockade to a newbie mapper
step one, make a new map (mooboopoo map! ftw!)
step two, lower the height from 1024 to 960 (depends what height your working at)
step three, tag lindef type 44 to any linedef in the control centre, then set your desired height and floor height
step four, tag it to the desired sector and see the sonic style water!
woah that was a mouthful, hope this helped.