Why not water as fuel?

Yes. This is my understanding of why although I am not a chemist or physicist.

The first law of thermodynamics means that energy cannot be created or destroyed, just changed forms. http://en.wikipedia.org/wiki/Laws_of_thermodynamics#First_law Transforming water into hydrogen and oxygen requires energy, and that is the same amount of energy that you would get if you recombined hydrogen and oxygen (by burning the hydrogen).

There is no free lunch. If there was a free lunch them some bacteria would have stumbled on it millenia ago and reproduced enough to fill the entire biosphere.

It is possible to reduce the amount of energy required to split the water molecule by using special alloys, but in doing so the alloy oxidises and to reuse the (expensive and rare) alloy requires you to de-oxidise it which again requires energy. So the alloy just shifts the energy usage to somewhere else, possibly hiding it long enough that a reasonably convincing prototype water car could be shown to 'work'

Don't hold your breath waiting for this "technology" to come to fruition. Unfortunately, treating technology as a faith-based religion will result in this fantasy of unlimited energy being used as an excuse not to prepare for change and not to behave responsibly with the energy resources that remain to us. It is not only foolish because it defies the law of conservation of energy/mass, which has proved to be immutable throughout all of sciences experiments right down to the minutiae of sub-atomic particle physics, it is also grotesquely irresponsible for individuals to promote this free energy concept as it give believers permission to carry on in their familiar damaging ways and to vilify as "socialists by other means" those who accept resource depletion as a reality that needs to be addressed.. I would draw a parallel with the enthusiasm with which so many people applauded a few "climate change sceptic" scientists against the vast majority of the scientific community.

Andrew, did you read the wikipedia page about the guy who built that car?

http://en.wikipedia.org/wiki/Stanley_Meyer%27s_water_fuel_cell

especially http://en.wikipedia.org/wiki/Stanley_Meyer%27s_water_fuel_cell#Lawsuit

"That story broke in 2008" yes- and promptly sunk without trace . To try and link it to the Honda FCX Clarity promo with a clumsy paragraph obviously not written by the same author is fraudulent. It is what is known as a "non-sequetor". I note that on the same webpage there is an article claiming that the Japan and Haiti Earthquakes were deliberately triggered by dastardly secret technology called HAARP. Well that just about says it all for the news sources that you favour for your daily information diet.
I come on here to read the thoughts of contributors like Denis Tegg ang James Samuels and to read the reactions of others who can be bothered to think and do research and share their thoughts. Most recently I have noticed an alarming increase in the use of this site for the attempted promotion of cultish ideology and those who who would have us pay money to hear snake-oil salesmen tell us how to tune in to "cosmic vibrations" and so-on. Let me tell you something- this nonsense is poisoning the TTNZ website. I notice that comments to Denis's posts now appear on his personal blogsite but not on TTNZ. No surprises there then. Why would an intellectual heavyweight like Susan Krumdiek want to be associated with a site that is saturated with Woo-Woo? for that matter, why would the average Kiwi looking for guidance insult their own intelligence by bothering to revisit these pages?
I don't care if it's your intention to degrade or subvert this forum but the fact is you are Trolling whether you see it that way or not. Surely there must be some other place where you can meet with like-minded people? Try Zeitgeists forum!
I do not intend to give this subject any further engagement.

Just for the record, Bees can fly - and science understands how !
http://www.livescience.com/528-scientists-finally-figure-bees-fly.html