Duplicate image layer then transform>flip vertical.
Select the area of pool to be the "water surface" using the original image layer and apply a layer mask to the flipped layer.
Unlock the mask so that the image can be moved within the mask as desired.
Lower opacity slightly to reveal pool bottom.
Add ripples.
Clone inside edges of pool to reflect in the water.



forum discussion: http://forums.dpreview.com/forums/read.asp?forum=1006&message=27432710
original image by Al Reeder