Updated March 2012.
So you have a picture of something by water, but due to overcast skies or turbulent tides you don't have the reflection you wanted or maybe you have a great landscape you think would look really great reflected in a lake, well this tutorial will show you how to do it.
Step 1 - Change The Canvas Size
Open your image and then press Image>Canvas size to open the options that allow you to change the size of your workable area. Un-lock the aspect ratio of the image by clicking the chain and make your image twice as high; the easiest way being to change the scale to ‘percent' so you can just change the height to 200%.
Step 2 - Duplicate The Layer
The workspace should be twice as high now so you can go about positioning your reflection. The simplest way to proceed is to press the Duplicate Layer button and rename the new layer to ‘Reflection', or alternatively to copy and paste the original image.
Step 3. With the Reflection layer active open Layer>Transform>Flip Vertically to flip it so that it is now upside-down. Press ‘M' to equip the move key and left-click and drag the reflection so that the two images meet at the same edge, as the object would with its reflection.
Step 4 - Modify The Reflection
Now you have the images lined up we can start modifying the reflection to make it look more watery. The first thing we have to do is make it slightly blurred so it looks more watery, we'll do this in two stages with the motion blur, the first is to open Filters>Blur>Motion Blur and set the angle to 270 (straight down) and add enough points of blur to make it appear slightly shimmery. Make sure you have ‘Linear' set as the Blur Type otherwise it'll look rather different to this screenshot, you'd be able to tell there was something wrong at this point if you did. Press OK to apply the blur once you are satisfied and that is the first part of our blurring complete.
Step 5 - Apply A Ripple Filter
The next filter we are going to apply is the Ripple filter, which can be found in Filters>Distorts>Ripple. Unlike Photoshop's ripple feature GIMP's isn't that reminiscent of water, so first we want to apply it horizontally with a nice long Period (wavelength) and a low amplitude. What you can get away with depends partially upon the size of the image and what's in it. Make sure that the Edges setting is set to ‘Smear' so you don't get gaps along the edges of your image before you decide on anything. Apply the filter to create your horizontal ripples once you have something that looks how you want it to, remembering that subtle ripples will be more convincing than massive ones.
Step 8 - Adjust Colour And Saturation
Finally we want to adjust the saturation and colour of the reflection to make it look more like it is being reflected in a body of water. This is easiest done with the Hue/Saturation tool, which can be found near the top of the list in the Colours menu. Once this is open you want to reduce the saturation (if you're in England you'll definitely want to do this due to our gorgeous weather) and move the hue so it is a little more blue/grey once you have tweaked these two options. Then, depending on the lighting of your image you can drop the lightness a touch too to create the impression of a deep lake or bay. Obviously you'll want to change what settings you use for these depending on the lighting in your image, but these are the basic starting point for a watery appearance. All you have to do now is incorporate this into your image and trim it to fit using a layer mask and adjust the lighting to suit yourself, and there you have it.