I'll throw in some speculation here. I believe a "good" water-cooling system will hold your "Load" CPU temperature (under PRIME95) at about 12F above its idle value. Its idle value, in turn, is likely to sit closer to room temperature than the best air-cooled solution.
That being said, the BEST air-cooled solution you can buy has a minimum thermal resistance of 0.16 C/W, and with your Prescott, any sort of TEC "enhancement" to that won't buy you a hill-a-beans. The thermal resistance of a water-cooler will be better than that of the XP-120 or XP-90 heatpipe cooler -- by how much I don't know, but that makes TEC feasible for water in either of two ways: "direct" application to the water-block, or a "chilled-water" arrangement with TEC between the water-block and the radiator. Even so, the TEC addition to the loop is bound to be less efficient, because TEC generates heat by itself.
But your question is a simple one, so ignore TEC enhancements for the moment. You will spend around $200 for a water-cooler kit. An air-cooled solution with a ThermalRight XP-120 and a quiet 120mm fan with decent throughput at a thermal resistance of 0.16 C/W should leave you with a difference between idle and load temperatures of 16C assuming your Prescott at "load" is generating something around 100W of heat. The air-cooled solution will cost you $60 or $70. That's about 9 or 10 C greater than a water-cooled solution, while water-cooling on the other hand costs at least $130 more. Provided that my "ballpark" speculation on the water-cooling "thermal resistance" is reasonably accurate.