Advantages
Water is inexpensive and non-toxic. The advantages of using water cooling over air cooling include water's higher specific heat capacity, density, and thermal conductivity. This allows water to transmit heat over greater distances with much less volumetric flow and reduced temperature difference.
For cooling CPU cores its primary advantage is that its tremendously increased ability to transport heat away from source to a secondary cooling surface allows for large, more optimally designed radiators rather than small, inefficient fins mounted directly on the heat source.
The water jacket around an engine is also very effective at deadening mechanical noises, which makes the engine quieter. However, the primary disadvantage is that it costs significantly more than an air-cooled engine system.
Read more about this topic: Water Cooling
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—Ralph Waldo Emerson (1803–1882)