Real Life Model of M.C. Escher’s “Waterfall”
From what I can figure, it's the usual perspective trickery (flat water track, vertical tower, perspective makes it look like they line up), and then there's a nozzle pouring out water from the tower top.<p>Note that the water doesn't appear to flow in front of the wooden knob at the ledge it's supposedly falling off.<p>EDIT: Looking again at the HD version it seems I'm mistaken. ars' comment appears to have it correct, though.