i agree with you madhacker. while i was reading this i was thinking, with channels that small, you'd have to have very clean (and obviously purified) water to prevent scaling in the channels. that means you'd probably have to have an isolated system with a heat exchanger to your "dirty water" system.
I'm a chemical engineer and while I think this kind of R&D is exciting, it's also very scary. We won't see this technology for a long time, if ever. No one in their right mind will consider this a viable option without tens of thousands of man-hours of testing and research into it.
To take the brain analogy even further, I think that having microscopic water veins running trough a chip, is almost as having exposed brain tissue... it will be very very delicate and will probably need some kind of very tough protection... like the brain needs a skull.
All in all I'm really looking forward to purchase such a water powered processor or whatever they'll be using the technology for.
I could see these "cooling layers" somehow coming to the top of the processor(s) into a built-in heatsink (radiator) to dissipate the heat. Basically use the radiator instead of the CPU heat spreader...
Of course this would mean the end to aftermarket heatsinks/waterblocks.
Some other liquid other than H2O will need to be used, it will need to be hermetically sealed (read tamperproof) and be able to perform for at least 40,000 hours MTBF. No processor cooling system today can function that long without requiring regular maintenance. It will be a challenge developing the specific fluid for such cooling, but if technology can do it, it might just make 100+ core processors a reality.
The real potential I see for this technology will lie in computer graphics/imaging. Think of 100+ core GPU power on a single card? It will make games like Crysis today look like Pacman.
In fairness to the comments about, a company like IBM will invest thousands of hours on this because this is what it takes to take data centres to the next level... And luscious is correct, water wont be used, but rather a mix of liquids optimized for this purpose...