As for water vs. liquid metal cooling:
Physically, water has a strong advantage over metals: <b>water has tremendously high specific heat</b>- just over 10 times the specific heat of copper, for instance, and about 5 times the specific heat of aluminum. This means that dissipating 100W through water will heat it only very slightly: it will heat up 10 times less than an equal mass of copper.
However, unfortunately, while water does have 10 times the specific heat that copper has, it also has a several hundred-fold (~800-1000!) disadvantage at thermal conductivity. This basically means that while water will have a huge thermal inertia, it will also not do a good job at heat conduction. It can <i>store heat</i> very easily, but it's just not very fast at <i>transporting heat</i>, unless, of course, you move the damned water itself around like in watercooling systems and keep the <i>temperature difference</i> between a large area interface of water and radiator, for instance.
The use of a metallic liquid is therefore very justified to counter this effect. Sapphire has been reporting that they're using a gallium-alloy-based liquid coolant. If you check the thermal characteristics of gallium, it's pretty clear that it would make for a suitable liquid metal coolant. Gallium is one of four metals which are typically liquid at near room temperature - with the other three being mercury, caesium and rubidium. In addition to that, gallium has nearly the same heat capacity as copper, and it has 80~100 times the thermal conductivity of water! In a closed loop, a gallium coolant will therefore have <b>0.1x the specific heat of water,</b> while at the same time being able to <b>conduct heat 80~100 times better than water</b>.
These numbers seem to suggest that a gallium-alloy coolant would do much better than water. You might be inclined to think that it heats up ten times "faster", but that's not the whole picture: it would also be capable of coping with that heat and transferring it over to a heatsink much, much faster. A radiator for this sort of coolant would only have to have <b>80~100 times less area</b> to be as effective at heat dissipation as an equivalent water radiator.
(AFAIK... anyone please correct me if I'm wrong)