Water is essential for almost every process within our bodies. In fact your body comprises over 70% water. Drinking plenty of water every day increases your cellular hydration, rehydrating the skin and helping your body to eliminate toxins. Try to avoid flavoured water, because it is loaded with artificial sweeteners or sugar.
You should also be aware that the mechanism that triggers thirst deteriorates as we age, so you should not wait until you are thirsty before you drink. Try to consume 2 litres of water each day.
Dehydration can cause constipation, can impair brain function and can lead to greater inflammation of mucous membranes during times of illness.
The one caveat I would add is that filtered water is by far the best option. Mineral water is great in theory, but the plasticisers, leaching out of the plastic bottle it comes in, detract from its benefits.
I use a water filter system with 13 stages, that helps to remove heavy metals, pesticides, bacteria and many other unwanted substances. It finishes by re-mineralising the water and balancing its pH to be more alkaline by using coral. You can purchase them from eBay for the equivalent of around £90 or $150, but it will produce water for over a year on a single filter.
Update: The best alternative and a recent acquisition in my household is an Alkaline Water Machine, which not only re-mineralises the water, but also adds hydrogen ions and alkalises it. This is great because cancer and many other diseases cannot function in an alkaline environment.