"ptricks"
OK, what sensor to buy for this IR method?
Sensor depends on how big an area you need to cover. One of the most effective methods I used was to place an IR LED in a small tube just slightly longer than the diode itself. In a second small tube place a photo transistor. The reason for the tubes is to prevent the light from the IR source registering on the sensor because the two are next to each other.
The IR source leaves the tube, reflects off the liquid surface and returns to the transistor where it allows a current depending on how strong the IR. You could also use a CDS photocell for the sensor and a visible light source like a white led. The closer the water, the more light returned and the resistance will change on the photocell.
Circuits for these are everywhere, you are basically just taking an IR proximity sensor and extending the range.