This paper presents a Web 2.0 virtual observatory framework applied in an environmental watershed research context, where users not only can access existing sensor data such as the USGS (United States Geological Survey) rain gage data in near real-time, but also can create and share virtual sensors and trigger their associated workflows on-the-fly. Categories of virtual sensors are discussed and community participation and collaboration on creating virtual sensors can be promoted. An eScience use case which allows users to create virtual rain gages on a Google map front end using NEXRAD (next generation weather radar) data is presented.