I’m looking for a game engine that can handle large terrains and allows for realistic water flow. I would like to be able to place sloping streams and rivers, with waterfalls.

Being able to have small boats travel the waterways would be a bonus.

Does anyone have any suggestions?

Unfortunately, no, but it would be great to see one.

I have not dug too deeply into Havok's Anarchy engine, does it have any kind of water support?

Project Anarchy seems to be aimed at mobile devices.

I asked at the C4 forums, and it seems that there are plans to add river creation features (including downhill ones), but the engine doesn't currently support them.

Cryengine also seems to have good water simulation. It includes a river placement tool, but doesn't currently allow them to slope.

The reason I mentioned C4 is because it actually has a ton of water simulation that you're not going to find in any other engine that I've seen (I.e. actual wave simulation that affects objects in the water). Also regarding the river creation and painting tools those will be included in version 4.0, which they're showing a preview of at GDC is year.

It looks promising, I wish they had a video of it in action, but they do list

"Real-time large-scale fluid surface simulation" as part of their physics.

but they do list
"Real-time large-scale fluid surface simulation" as part of their physics.

Buoyancy takes into account wave height, etc of the actual water simulation. If you wanted even more information regarding their system I would recommend asking Eric Lengyel on any specifics, or posting in the C4 forums.

I've discovered that Heroengine has a spline-based, "ribbon water" river tool that allows you to create rivers and streams at different heights and widths, which might be an option for anyone wanting to create a massively multiplayer online game (I'm not).

There's a 3 minute Youtube video at