Nice concept, some execution flaws.
Like everyone else is saying, getting stuck in the rocks sucks. What you want is a "projection" collision/reaction system instead of the simple hittest/deflection model you seem to be using. Also, I don't like the invisible wall of certian death just to the right of the town. Especially with the more powerful jet upgrades, when I'm coming in hot I need to be able to swing around in a wide arc, dodging cacti, and spiral in towards my goal.
Personally, I liked the music. The game doesn't last long enough for it to get too annoying, and it's a damn sight better than the 5 second atonal piano music MP3s they give you by default.
Some buildings around the well, and some wiggis who cheer when you deposit your water would be nice cosmetic additions.
And I agree that the arrow should point towards the fullest oasis. Weighted arrows that show the relative depth of each oasis would be nice, but trickier to program, and maybe a bit too complex for a 5 year old to read.