's most surprisingly useful items, the Potion of Water is a valuable item to almost all players.
It's one of the items that is always named the same unidentified name- "Watery Potion", so it's easy to spot.
It's also always blue and weighs 4S, and one of the more common potions. They're annoyingly hard to find at times, but still more common than a Berzio Potion or a Potion of Ultra Healing.
The uncursed Potion of Water (Tastes like Plain Water) has three uses, and isn't terribly useful most of the time. However, it is by no means totally useless... it can be used to dip an Iron object in to rust it, which can be useful when you're carrying an iron cursed weapon, helmet, or such. You can have it dip in and break quickly, or even rust it away in water!
The second use of the Uncurse potion is Cleansing scrolls. This has few uses, normally, for blank scrolls are not entirely useful; but there is a use. Blank Scrolls can be used with a magical writing set to create more useful ones (Scroll of Increase Melee Accuracy, EG), and the water can also wipe away dangerous scrolls like Scrolls of Amnesia.
Finally, an uncursed Potion of Water can be put on an altar of a deity you worship to be coverted to Holy Water. And trust me, Holy Water is useful.
Whereas normal water's okay, Holy Water (Tastes like fresh and clean water) is fantastic. Not only does it not wipe scrolls or rust weapons, but it instead *blesses* them. This can be great when you have an auto-cursing item, as instead of using a scroll of uncursing, you just dip it in here. It can be used on other objects that have a better effect when blessed, like Food or Rings of Djinni Summoning.
Secondly, Holy Water can be thrown at undead for nasty, nasty damage to them. The effects can often kill a Zombie quite swiftly, and even harm Liches. If poured on the grave of Griff Bloodaxe (a quest in the game), it will not only destroy him but put his spirit to rest, too (a lawful action). This is very useful, because he and the Necromancer in the graveyard are annoying enemies at best.
While the above two are often useful, the (cursed) Potion of Unholy Water (Tastes like muddy water) is rarely useful; all it does is curse an item dipped in it. While this may seem absoloutly useless, there is, in fact, a good use: one or two items may be preffered when cursed, such as Dark Elf Spider Bread. Normally, this stuff is only reasonably nutritious, but when *cursed*, it is quite, quite excellent food! Likewise, when blessed, it is less nutritious. As far as I know, this is the only use for the Unholy Water.