It's partly placebo, and partly good medicine.

Doctors and nutritionists have been nagging us for YEARS to drink more water. Remember that "8 glasses of water per day" admonition? They're not saying that just to help themselves talk -- that's the average amount of water that a healthy adult needs (average. Your mileage WILL vary.) Water causes increased urination and flushes out the system.

Too much water, however, is not good because a lot of the vitamins and minerals are water soluable.

So, yes, I think there is a definate positive effect there. Some symptoms improve with time (my daughter's asthma got better as she got older and she did nothing in particular for it). I think it is one component of treatment/cure, but I sure don't think it's the ONLY one.

Here's an analogy: Putting the best grade of gas and oil in your car may help it run better and longer -- but it won't prevent your transmission from going wonky. High grade gas and oil will, however, keep the car in good condition (generally) and running longer. Water will help your body run better and will fix certain problems (tendancy for gout, will thin the blood a bit, flush out energy waste products), but it won't cure arthritis or cancer or leucopolycythemia or aneurysms or high blood pressure (unless caused by too much salt) or tuberculosis or... well... you get the idea. :)