water is good. Without it you'll start losing muscle mass. Believe me, i know. I once went 24 hours without a sip of water in order to lose 12 lbs in one day. I had to drop down to 103 lbs so that we'd have someone wrestling in that weight class (i usually wrestled at 112-119 lbs) and like an idiot, i didn't allow myself enough time. Without food or water for 24 hours, you feel like you want to die. The low blood sugar made me want to pass out all day, and not drinking any water made it feel like i was pissing sand. It also makes you cramp like a mofo when you're running and training to try to lose that excess water weight.
water weight does make you look less "cut," but it also helps to prevent muscle atrophy. If you were a body builder, you'd generally partially dyhydrate yourself before a competition.