Ok sounds like a really fun project so i just went and made one (thought it may help if your not used to reading schematics)
[size=18]DRY[/size]

[size=18]WET[/size]

And just to set you off in the right direction here is the code to light up pin 13 when it detects water
/* Flood Sensor
This sketch will light up the LED on Pin 13, when water (anything conductive) bridges the gap in the sensor.
created 02/09/09
by n00b
*/
const int floodSensors = 2; // the number of the Flood Sensor pin
const int ledPin = 13; // the number of the LED pin
// variables will change:
int floodSensorState = 0; // variable for reading the floodSensors status
void setup() {
// initialize the LED pin as an output:
pinMode(ledPin, OUTPUT);
// initialize the flood Sensor pin as an input:
pinMode(floodSensors, INPUT);
}
void loop(){
// read the state of the flood Sensor value:
floodSensorState = digitalRead(floodSensors);
// check if the flood Sensor is wet.
// if it is, the floodSensorState is HIGH:
if (floodSensorState == HIGH) {
// turn LED on:
digitalWrite(ledPin, LOW);
}
else {
// turn LED off:
digitalWrite(ledPin, HIGH);
}
}