Baking soda/water works fine to neutralize the acid. Big puffy or crusty chunks of white or greenish corrosion around the battery terminals are indicators that the metals have been exposed to the sulfuric acid in the battery. This happens because the seal between the lead terminals and the plastic battery case degrades over time. General procedure:
Before clamp disassembly:
-Moisten the corrosion (don't wash it away)
-Liberally apply baking soda and wait a few minutes
-Make sure to rinse well when you're done, including the area beneath the battery, to
prevent any un-neutralized acid from causing gradual damage/corrosion
If you want, at this point disconnect the clamps from the battery (negative first!) and continue cleanup. I like doing the pre-clean because it prevents me from having to expose my tools to the acid.
Note that distilled water is not electrically conductive on its own, and tap water is only very marginally more so. Battery electrolyte (acid) is conductive, and if it covers the battery's exterior surface between terminals or between the (+) terminal and the car's chassis, it will result in a 'short' which will drain the battery while it's at rest.
Therefore, it may be valuable to spread the baking soda over more of the case than where there is apparent corrosion to neutralize as much of the leaked acid as possible.
Finally, DON'T allow any of the basic material (baking soda) to find its way into the battery's case through the vents or whatever; this will partially neutralize the electrolyte inside and can significantly reduce the battery's capacity (although if it's leaking and causing corrosion it's probably not long before it's due for replacement, anyway).