Ah yes, rivers and streams ... I have many modular sections of both stream and river and usually paint them the reverse to your method as shown in the pond. In other words I blend from the colors of the banks into dark blue (almost black) in the middle. I then coat with artists gloss medium or varnish (depends on how much foam there is in the neighborhood.) It's an old model railway technique that's very effective. Someone on the model railway newsgroup was having problems with getting a subtle enough blend and suggested painting the bank color across the watercourse and then spray painting the dark blue. The overspray accomplishes the grading.
I have a great idea on how to make the appearance of water: (it has only been tested with ponds)
First make a normal pond piece of terrain. Then instead of using hard to work work with varnish use Elmers Gel school glue...yes, the name you grew up eating in kinder garden. It dries with bubbles in it already and it dries clear. The only thing you have to do is paint the bottom of your pond the desired colors, and squeeze it in. This may require 2 coats of glue. When it dries it will shrink in depth. Then finish your banks off with sand or tiny cat litter, drybrush and your set. It is easier than dealing with hard to cleanup varnishes
Well, I love your site, and I was playing with my foamcutter... And I made some very nice looking river (one section anyway) with my sheet of foam insulation and my cutter, and here's how it works: