When you think of water in your engine, you probably imagine floods and other scenarios where an engine gives up the ghost after trying to compress something that is incompressible. That can definitely happen, but if it's wielded in the right way, water injection can actually confer a number of benefits.
Bosch's WaterBoost, which is quite the silly name, utilizes injectors to deliver controlled bursts of distilled-water mist into the engine's intake, which leads to the combustion chamber. When it enters the engine in this manner (instead of being sucked up by your intake, gallons at a time), the water actually helps to cool the combustion chamber.
It reduces the chance of knock and allows engines to operate at higher compression ratios, increasing efficiency. Bosch claims water injection can reduce fuel consumption by up to 13 percent under acceleration or during highway driving. The water is held in a tank inside the vehicle, it only needs to be refilled once every 2,000 miles or so, and it's simple to do -- just pour distilled water in the special tank, and you're done.
BMW uses WaterBoost in its M4 GTS sports car, and water injection (usually involving a bit of methanol, as well) has proven its worth in the aftermarket, as buyers seek to get more and more out of their vehicles without blowing the engine sky-high. Water injection has also been used successfully in military aviation engines
Bosch is bringing this to the mainstream because increased fuel economy standards have caused many automakers to start downsizing engines, and temperature can be an issue at that point. It's not like your engine is going to rust or you're going to hydro-lock the vehicle. Water can be both good and horrifically bad for an engine; it just depends how it gets in there.