a gravity bong is where the cut bottle (the chamber, if you will) is raised and lowered in the water to move the smoke, as previously posted...

a waterfall is when you have a chamber bottle, except you have a single small hole on the bottom (small enough to cover with your finger). you fill the bottle with water, and use the cap/socket/foil or whatever on the opening at the top...light it and release the hole, the water will drain out slowly and fill the bottle with smoke. then you remove the bowl and suck it back, and poof! stonedasfuck.