Some empty lines and right indentation can do miracles 
If you have the code in the IDE you should press CTRL-T to re-indent the code to make it more readable.
rewritten the code without delays so it is far more responsive without flooding the serial output - find the differences 
- and give it a try
//
// FILE: garduino.pde
// AUTHOR:
// DATE: 2012-NOV-01
//
// PUPROSE: watering plants
//
#define WATERTHRESHOLD 850
#define LIGHTTHRESHOLD 30
#define OUTPUTINTERVAL 1000
int photocellPin = A0; // the cell and pull down are connected to a0 to check for light levels
int WaterSensor = A1; // Water level sensor
int photocellReading =0; // the analog reading from the analog resistor divider
int lightarray1 = 13; // lights for the plants
int waterpump = 7; // Its the pump for the water
int water_val = 0; // stores the value for water levels
unsigned long lastOutput = 0;
void setup(void)
{
Serial.begin(9600);
Serial.println("Start garduino...");
pinMode(lightarray1, OUTPUT);
pinMode(waterpump, OUTPUT);
digitalWrite (waterpump, LOW);
}
void loop(void)
{
//turn water on when soil appears to be dry stop when the plant is watered
water_val = analogRead(WaterSensor);
if (water_val < WATERTHRESHOLD )
{
digitalWrite(waterpump, HIGH);
}
else
{
digitalWrite(waterpump, LOW);
}
//turn light on when it appears to be dark
photocellReading = analogRead(photocellPin);
if (photocellReading < LIGHTTHRESHOLD )
{
digitalWrite(lightarray1, HIGH);
}
else
{
digitalWrite(lightarray1, LOW);
}
// DO SERIAL OUTPUT ?
if (millis() - lastOutput >= OUTPUTINTERVAL)
{
lastOutput = millis();
Serial.print("Water levels at: ");
Serial.println( water_val );
Serial.print("Light at : ");
Serial.print( photocellReading ); // the raw analog reading
}
}