While most experienced liquid coolers will probably discourage you from trying to use plain old tap water in your liquid cooling system, the fact is that many people still do it that way, and like it. The obvious advantage is, of course, the fact that you don't have to find and purchase a special fluid for your cooling purposes. Water out of the tap is only a few cents. Water also has documented cooling advantages, being one of the top liquids for shedding heat when compared to other options.
What is the downside though? There has to be one, or else no one would drop any amount of money on a specially formulated solution. The fact of the matter is that water is a dangerous choice. Leaks, spills, drips, and other accidents are not uncommon in liquid cooling systems. If plain tap water dripped onto a component of a running PC, that would very likely be the end of the entire computer, or at the very least that one component. Most enthusiasts put too much time and money into their computers to risk it all by trying to save a few bucks on liquid. In spite of that, water is still very much loved for its cooling properties, and distilled water has become a popular choice.