Personally, a waterfall is my favorite part of the pond. They are beautiful to look at, the sound is relaxing and they are beneficial to recycling and aerating the water, especially important if you have fish.
If you're building a pond, you should think about incorporating a waterfall during the construction phase. Taking the excavated soil and piling it up where you'd like the waterfall to be placed makes it a whole lot easier than coming back later and adding it. An even better idea would be to incorporate your new pond near an existing sloped area around the house. Building the waterfall into a side hill or sloped section of the lawn will give an even more natural appearance, like it always belonged there! But remember, adding a waterfall after the fact isn't so bad; you can always bring more dirt to your site.
Depending on your tastes, waterfalls can be formal (very symmetrical, straight lines easily achieved with a foundation of block, or pre-formed, with many shapes and sizes available out there) or more natural by using a flexible liner and a little imagination. For a step-by-step video guide on how to design, build and care for the perfect water garden, visit www.tetrapond.com.
Excavate your proposed waterfall out of your pile of soil, in steps, down to the pond. Remember, try to keep it natural looking and in proportion to your pond. If it is difficult to carve out the steps from the soil, since it is sandy or loose, consider using concrete blocks for a foundation. This is covered in detail on the website video under waterfall construction.
Regardless of the size it must be lined with a flexible liner such as PVC or EPDM to prevent water loss into the surrounding terrain. It does not have to be one, single piece, which would be difficult to work with, but can be several pieces. For example, if you have a header pond (small pond at the top of your waterfall that feeds the waterfall), that can be one piece; simply overlap the upper piece several inches or more over the next piece on each "step" as you work your way down. Gravity is our friend, but be generous with the overlap so water does not escape underneath and out of your waterway.
Draw the liner up on each side as well to avoid water escaping over the sides. Starting at the bottom or entry point to the pond, work your way up using flat rocks to secure the liner as well as hide it. Place smaller flat rocks on the first step, then place a flat rock on top of them against the back of the first step, or riser. Make sure the overlapping liner is secure behind it. Then place a flat rock or smaller rocks on the next step on top of the "riser" rock to hold the liner in place and hide it. Repeat. As you work your way up, keep a hose handy for testing the water flow over the rocks and adjust them to create the best flow and optimum sound. Add rocks to each side of the stepped waterfall to support and hide the liner. To maximize water flow, use waterfall foam sealant. This black foam fills the cracks under and between the rocks, channeling the water over the waterfall rocks.
Next, test water flow with a hose or run your pump if it's operational. Now is when you want to carefully observe if any water is escaping out of the sides or underneath, and adjust accordingly before you do any landscaping. Keep an eye on the pond level over the next several days. If you see a drop in the level, look for some wet spots in the soil around your new waterfall, and adjust accordingly.
Remember, take your time, use your imagination, but most of all have fun.