Background
Take the Tobu bus from Nikko to the Ryuzu-no-taki bus stop. A bus timetable can be found on the Japan National Tourism Organisation website. There are a number of train, train/bus, and bus-only multi-day tickets offered by the Tobu railway company. If you are interested in visiting the temples in Nikko then one of these passes will suit you well. Alternatively, like us, if you are only interested in hiking and you have a JR Railpass, then you will be better off just getting the 2-day bus pass from either the JR or Tobu railways stations in Nikko for Y3,000. This will give you unlimited bus usage to and from Yumoto Onsen over a two day period. Please note that when we were there (Sept. 2012) you COULD NOT buy this bus-only pass from Asakusa Station in Tokyo.
The Hike
1. From the bus stop, walk back along the road (south) for about 20m and take the small road on the left hand side across the river towards the cafe.
2. The Ryuzu waterfalls are located in behind the cafe and are spectacular, particularly during the autumn when the surrounding foliage turns gold, red and orange. You can grab a meal, or use the toilet facilities (in the carpark) if necessary. As this is one of Japan’s most beautiful and well known waterfalls, be prepared for crowds! With patience though you will eventually get a good spot at the front where you can set up a tripod and take some great photos.

Ryuzu-no-taki (Ryuzu Waterfall)
3. Walk up the concrete path along the eastern bank of the Yukawa River for the next 300m alongside some very pretty rapids and small waterfalls until you get to the road. On the other side of the road you will see that the (dirt) hiking trail continues alongside the river.
4. Taking the dirt trail and duckboards along the eastern bank of the Yukawa River, you will pass through a mixture of Japanese stiltgrass, oak and larch trees, while also experiencing numerous views of the flat marshlands of the Senjo-ga-hara Plateau, with the imposing Mt Nantai in the background to the east. While beautiful at any time of year, the plateau is reputedly at its best during autumn. After re-entering the forest you will eventually reach the massive Yudaki waterfall approximately 1-1.5 hours after first setting foot on the dirt trail back at Ryuzu-no-taki.

Senjogahara Plateau

Mt Nantai and the Senjogahara Plateau
5. Yudaki waterfall is massive, with the Yukawa River descending 75m over the length of the falls. A viewing platform is located at the base of the falls where some great photos of the waterfall can be taken. Taking the steps up the eastern side of the waterfall, a short but very steep climb brings you to the top of the waterfall.

Yudaki-no-taki (Yudaki Waterfall)
6. Another 5mins of walking will bring you to the shores of Lake Yunoko where the path splits an you can either take the slightly longer, but quieter western path, or the shorter path alongside the main road on the eastern side of the lake. After only another 20 minutes or so you will emerge from the forest at the lake’s edge to be greeted by the township of Yumoto Onsen.

Lake Yunoko
7. In Yumoto Onsen there is a great cafe located on the shores of Lake Yunoko, while accommodation can be found at one of the many (expensive!) hotels. Alternatively, you can take the Tobu bus back to Nikko, perhaps stopping to view the stunning Kegon waterfall on the way through.

Kegon-no-taki (Kegon Waterfall)
Conclusion?
In total the hike from Ryuzu-no-taki to Yumoto Onsen took us around 2.5hrs. Bearing in mind that I was taking quite a few photos you could probably complete the walk quite comfortably in 2hrs. The trail is very flat for almost its entire length, making it very accessible for both young and old. The only steep section is found at Yudaki waterfall, but be aware that this is extremely steep!
For us, this was the perfect half-day hike, as we had travelled up to Nikko from Tokyo that morning. The numerous buses to Yumoto Onsen meant that we could stow our bags at our hotel in Nikko at midday, and still have time to get to Ryuzu-no-taki and complete the walk prior to the last bus leaving Yumoto Onsen back to Nikko in the late afternoon.
For a more casual perspective of the Nikko region, feel free to have a read of my travel blogย entry.