Players should not have to go down for it to be a foul, the foul occurs regardless of a player staying on his feet or not, referees should be less rubbish.
I've said before that players should be able to appeal for a penalty. If a player believes he is fouled and wants play stopped, he stops playing and puts his hand up, and the ref will then make a decision. If he doesn't appeal, he doesn't want the foul (unless he's been totally flattened).
This stops players having to go down to get the foul, helps get rid of the problem of diving (a player should only hit the deck when it's unavoidable) and means that players won't appeal for fouls unnecessarily - they have to stop playing to appeal, so an incorrect appeal means losing the ball.