Water cooling done poorly and with cheap kits is a waste of time in my opinion. Great air cooling with great case cooling will give you just as good of results as poor water cooling without the risks enherent in water (which are overblown by the way).
Not so much to make you a fanboi of Danger Den, but just for good artlicles and movies on how it is done go here...
http://www.dangerden.com/e107_plugins/content/content.php?content.1
Not all the video links work, but there's plenty 'O instructions with plenty 'O pictures to give you good ideas as to what it takes to get the job done well.
After you've water cooled well, you'll never go back to air cooling. While total case cooling and power issues are still important with water cooled rigs, having the water cooling makes so many things more stable and easy to work with, it's just so much better than even the best of air cooling. Why?...
1) Water cooling WELL by itself takes you 85% to the possible limits of cooling technology. Do a Peltier WELL added to that and you get to about 95% of the limit of benefit from possible cooling technology and it is expensive not just to buy, but to run as well. Go from water cooling to compressed gas cooling WELL and it will take you to 98% of the limits cooling can benefit a given chip. Going liquid nitrogen even according to the technical people at Craig Computers gets you the last 2% and that is all. So water by itself done WELL is "the solution".
2) Cooling down the CPU also cools the mommaboard. This reduces heat transfer to your very heat sensitive system RAM and even more heat sensitive video RAM as well. Water cool the GPU and you will reduce mommaboard temps as well. A few Intel's benefit from a water block on the chipset, but ask Danger Den by calling them if that applies to you. Just because they make a cooler for something doesn't automatically mean you'll benefit from it. Always call them once you've finalized plans to see what imput they'll give you. Quite often, they can save you time, money and trouble. Well worth the phone call if you ask me.
Cooling down the mommaboard will make it so when you overclock, you can do so while not opening up RAM timings so fast. This way you get a better yield from any overclock. Even if you don't overclcock the CPU or GPU, you can still benefit by having tighter RAM timings at stock speeds or close to stock speeds than on air cooling as well as longer lifespan of components.
3) Water cooling is quieter, but not quite silent when done WELL. The smaller the radiators you use and the smaller the pumps in general, the louder it will be. Passive cooling gives how would I politely say this?... passive results?