Jen;
It sort of depends on the effect you want; I WAS going for a 'light up the upper third of the pond' look by placing lights on both sides, aimed at each other (my pond is roughly 6x18 across much of the length) but the 10 lights would not have permitted that, so I went for one side only and knew I at least wanted to 'light' up the falls. Putting the blue filters on was my wife's and son's idea as I probably would have been happy with the clear ones. This particular kit comes with 5 different colored filters for each light, so there's obviously other effects you can have. I tried the amber one, but thought the clear looked better. There's green, clear, amber, red, and blue. The blue was just an obvious choice (I guess) for the waterfall. Now, I don't think you'd get a lot of light if you place these on the bottom (unless you have a shaller pond; mine is 4'), pointing up. I have mine about 12-18" down, with some being near the surface as I tend to put them inside the potted plants. I liked the patterns that evolved when the plants were more mature last summer. But there's different effects to be had, that's for sure.
IMO, I like directing the lights slightly downward as they tended to 'shine' in the eyes as we sat around the pond at night. Had similar problems with the falls' lights before I covered them from view as their light was especially bright if you were sitting at the right angle. The ones on the falls are basically behind more fallen rock, and pointed at each tier's fall. Last summer, I only had two tiers lit and thought when I set them up this spring, I'd include 3 for a more dramatic effect.
I like lighting just like I like the ambiance a pond gives in general, that's why for my 'pondhouse', I'm stringing more LEDs at ceiling height and weaving them into fake ivy so they, perhaps, appear more like starlight. Thought about stringing lines across the whole celing area but thought the pond might suffer as it would be less of a focal point. I also have hanging rechargeable solar LEDs near pond-edge, in the garden part of the pond, and one haning LED windchime. So, as you can see, I like the lighting effects!
The good thing with these low power units is the LED bulbs that should last a very long time, and be low cost. So far, maintenance has just involved cleaning the filter as algae occurs (only did it once last fall as I put them in late last summer).
Michael