Water Reflection
This effect works really well when you're using landscape photos, which is why I opted for that rather than a neopets image. It involves using filters that should already be present in Photoshop (if you're using 7.0 or higher). If you don't have the Distort filter, find it and download it off the internet.To begin, let's open up our image in photoshop.

Since this is a jpeg image, the image mode is automatically set to RGB color and is ready for editing. If you have opened up a gif image, go to Image > Mode > RGB Color to change it so that the image can be edited.
Now we go to the Layers window, which should look like this:

If you don't already have this open, go to Window > Layers.
Now right click on the background layer, then select Duplicate Layer. You can name this layer whatever you want, I'm just going to name it 'Layer 1'.
Now go to Image > Canvas Size and choose the same options as shown below:

In this example I've chosen to make the height one and a half times its original height, just to save a bit of space. You can make it anywhere between 100% and 200% if you like.
Make sure you have selected Layer 1 in the layers window, then go to Edit > Transform > Flip Vertical. Then drag Layer 1 down so that it connects with the bottom of the background layer. You should now have an image that looks something like this:

Now comes the part where you make the water effect. First, create a new layer on top of the existing 2 layers. It should automatically be called 'Layer 2', although you are free to rename it whatever you like.

Fill the layer with a white background (using the Paint Bucket Tool with white as your foreground color). Reset your color palette by pressing D on your keyboard. Now go to Filter > Sketch > Halftone Pattern and select the same values as below:

This should now fill up Layer 2 with black and white stripes. While Layer 2 is selected, go to Filter > Blur > Gaussian Blur and set the radius to 4.0 pixels. You can experiment with the blurring radius later, but for now, we'll stick to something small.
Now that we have the wave ripple template, we need to save it as its own document. Do this by selecting Layer 2 in the layers window, right click on it and select Duplicate Layer, except in the Document field, change the setting to New. This should open up the same layer in a different window. Now save this new window as a photoshop file (I have chosen to name it 'water') and close the window. In your original image with the 3 layers, delete Layer 2 as you already have it as a file all on its own (the delete layer button is right next to the create new layer button).
And now we are back to 2 layers again. Select Layer 1 and go to Filter > Distort > Displace and choose the following options:

Click ok and a new window appears asking for the displacement map. Choose the blurred-stripes file that you created earlier (I named mine 'water') and press Open. Layer 2 has now been distorted successfully.
The final image looks something like this:

However, as a final touch, I made the lower reflected part slightly darker since the photo was not taken on a sunny day, so the water is not going to be completely clear, hence a tinge of dark blue was needed to give it a more realistic effect. But you don't need to do this, leaving it in its original reflected state looks pretty much the same.
~Jen