Yeah I agree with Dishdog.
Basically water cooling works by having a resoviare full of water, and a pump then takes this water along pipes connected to heat conductors on the surface of cards, and CPU, and the heat automatically conducts upwards and so it gets collected in the cooled water which then heats up. A cooler (using a fan and special chemicals) then cools down the water again, ready to be used again and again and again.
Water cooling is good though and can really lower down temps (especially if you have a super charged Pentium 4 processor) and tend to be much better than fans at cooling, plus it has the standard ability to be cooling your PC more, and yet isn't as noisy (as only the pump and probably one fan will be making a noise)
You do need a big case though to hold the resovoire and also have room for pipes, and I don't think a standard computer case would do it. There are ones with extra thickness which would be great for a watercooled system, so you have to look around.
Overall though, if you can get one, they are worth while. You do have to be careful though (but there are usually detailed instructions) like properly tightening connections so no leaks occur (it is electronics after all)
They say to connect it out of the system first to test for leaks, and then put it in, which seems logical to me.
It is true though that an overclocked system will make much more use of it, though it is worth it just for the super quiet system in some cases, especially if you have many fans in your case at the moment!
I hope this helps