Location is not an entityField inside the Waterway entity, but it's a field mapped to the related entity.
Normally you'd want to display a field or a couple of fields from the related entity, not the entire entity object.
Now if for example you want to display Location.Name you have the following options:
1- Handle some datagridView event (eg. RowsAdded or CellFormatting), to manually grab data from the bound related entity and insert it in the specified column.
2- Use a flat object (DynamicList or a TypedList), which is used to display fields from multiple related entities, but in a read-only fashion.
3- Use the Designer to create a "field on related field" (eg. LocationName) in the waterway entity, which gets populated by the prefetchPath call.
4- In web apps (for reference), you can bind to a related field with the following code:
<%# DataBinder.Eval(Container.DataItem, "Location.Name") %>
Also please check the following thread:
http://www.llblgen.com/tinyforum/Messages.aspx?ThreadID=9384