It seems that in previous versions (blender 2.49) a particle could generate other particles on hit/death. That was a setting called ‘react on’ or ‘Reactor’
(http://wiki.blender.org/index.php/Doc:2.4/Manual/Physics/Particles/Types).
Has that feature gone?
If yes (hope not!!!) is there another way of accomplishing an effect like rain splashes, multiple sparks on hit from 1 particle, …?
Thanks for any ideas
Unfortunately that feature is gone. You can use dynamic paint to achieve such an effect: https://www.youtube.com/watch?v=n-iOfRrEDo0
There are also a few scripts that try to emulate that, here is one: https://www.youtube.com/watch?v=G-r3eXXlc1M
A real pity, so then I hope the overhaul of the Particle System (rumors about node based approach?!) is moving up in the priority list…
If I was a coder, that would be my playground… 
Thanks for the information
We’ll have to be patient, because the entire system needs to be rewritten from scratch. The code is confusing, there are duplicate buttons in the interface, etc… For now a new hair system is the works, with a brand new solver partly based on this paper: http://graphics.pixar.com/library/CurlyHairA/paper.pdf
The goal here is to separate the hair system from the (regular) particles, both in the code and in the interface. Then work on the particles will most likely continue as it was started a few months ago, but stopped from some reason (maybe the hair/particles separation needed to happen first). And yeah, it will likely be node based.