It is all about exposure. The longer the exposure the more the water flowing by is creating a reflection captured by the camera. This is painting little dots of light that eventually form a washed out effect. The longer the exposure the more washed out the effect.
You just need a good tripot, a remote shutter release and off you go. In low light you can use exposure times of 1 or more seconds that will give you this unreal result. Experiment a little. Especially with a digital camera you can play with differerent settings. If light is too bright you can use 1 or more grey filters that lower the amount of light that goes through the lense.
Have a look at my website for some examples of this effect: http://www.achimdrescher.com/
