Not even normal arrows work on servers, I think. Risugami or someone else would have to add the entity IDs to the server, then make arrows work in the first place. At the moment, everything is client side. But yeah, rocket jumping in SMP is fun, and so is climbing waterfalls with ice.
As for water arrows, Seiseki, ice arrows already put out fire, perhaps they could break torches too.
I updated the arrows. I changed the fire arrows to use coal instead of flint and steel, Ice arrows can break torches now, and I added a comedy arrow: the egg arrow. I think the recipe for egg arrow is obvious. It has a secret...
Risugami updated the download on mediafire, so I don't have to change the link, they are correct. The fire, egg, and explosive arrows only give one arrow, while you get four arrows out of the ice recipe, to help balance the fact that you use a bucket.