I've been having a lot of fun shooting water drops in the past couple of days. I've wanted to do this for years and finally got around to it. I haven't been able to capture the classic falling water drop crashing into a drop bouncing upward yet, but nevertheless I'm pleased with what I've taken so far.
The setup is simple. A plastic bag hangs above a tray of water, and a small pin prick stars the water dropping. I love color, so I put a piece of computer paper smeared with various colors of paint behind the tray. A portable flash is aimed at the paint, not the drops. I used a medium telephoto lens with two extension tubes to fill the frame with the splash, and the flash was used on manual exposure mode set to 1/8th power to reduce the flash duration to 1/8000th of a second to freeze the action. You can see the setup below. Notice how close the flash is to the background. That's necessary because the flash power was reduced so much and by placing the Canon 580EX flash unit close to the painted background, I compensated for that reduction in light. I added food coloring to the falling drops for a color variation.
Focus is critical, so I used a plastic straw positioned exactly where the drops were falling to focus the lens. F/32 insured that the entire drop was sharp.