I have created a particle system for a water jet and applied a texture. It looks ok but could be better I think. The particle mechanics are fine, the problem lies with the texture. The texture is just a blue square with a circular gradiented alpha channel to create a fading blue circle. Does anyone know of a better way to texture a water particle? I can use alpha blending etc.

Well, water itself is clear, it's only when you put it in massive quantities that you get the familiar blue color. In a particle system, I'd refer to real-world particle examples: firehoses, waterfalls, lawn sprinklers, which usually (unless it's a dirty waterfall) come across as white more than anything.

If you're working with a low-force particle generator (like a roof leak or fountain) I'd alpha out most of the particle texture, with clear space in the middle and white edge effects with blur in the middle (I mean blur as a 2d filter in your graphics editor, not in the render).

This is all based upon a more realistic look, though. And it's conceptual, I haven't actually tried applying it.

The way of water droplets look is pretty much all due to refraction. Without refraction, the droplets just aren't going to look very convincing. Fortunately, faking it should not be too difficult.