If they ever make an AIO that is filled with non-electrically conductive fluid, I'll bite, until then, I'd probably stick with air cooler.
Ugly air cooler? No concern, I don't stare at my HSF when I game. If I really cared about looks, I would have returned my 'red' (actually pink) phanteks HSF and gotten V8 GTS instead.
The failure of a system resulting from an overloaded HSF is usually gradual (unless your mobo simply couldn't cope with the mass, then it will suddenly break immediately after you mount it), and chances are mobo will fail before something catastrophic happens to the rest of the system. With water, it is usually immediately catastrophic if a leak occurs.
Yes, I am paranoid, but that paranoia is hard dispell because I am inherently afraid of water running through a computing system, not actually afraid of a leak. Give me a cooling fluid that is electrically insulating (hence no danger of shorting), I'll probably bite.