Hi Natalie
In order to get the milky water effect you need to slow your shutter down, somewhere between 1/10 and 2 seconds will look great.
Its impossible to tell you what f-stop to use because that will depend on the ambient light but the chances are to get your shutter that low at a standard exposure your going to be at the f/22 end anyway and even then your unlikely to get the shutter you want with most waterfalls because white water reflects all the available light and is therefore very bright!
The way photographers get around this is to use a filter - which blocks out light, specifically you'd be looking at a Natural Density filter - these make the image darker to a certain extent but they keep the colours neutral; an ND6 filter would cut out 6 stops of light etc.
You can buy screw on filters which just go on the end of your lens and they are a great place to start. If you get into your filter stuff then you may find something like the Cokin P series useful - this is a combination of filters, holders and adapter rings which allow you to do a lot creatively.
I hope this helps, on one small note that waterfall looks quite shaded so the following recipe should work which may help if the waterfall is near you and you wanted to shoot it again:
Set your camera to shutter priority, set the ISO as low as it will go, use evaluative or matrix metering (don't know what its called on the D60) so that the exposure is balanced between the water and the background. Start with a shutter speed of around 1/25 and work down the range getting slower until your limited by the aperture getting to its minimum size. This should get you the shot you've been looking for whilst building up your technique too - cool eh? Remember that at these slow speeds your going to need a tripod and a remote release might be useful
*Note: F/22 is quite a bad thing - diffraction happens around F/8 - F/9 on a crop body which can lead to you loosing detail in the static elements of the composition - this is why we tend to prefer filters*
