It's not water you're inhaling, it's mostly a vaporized form of a chemical called polyethylene glycol. This chemical is used in bulk as a laxative (Miralax) and is a part of many other products for many other applications. Is this chemical taken in this way inherently safe or unsafe? I don't know. Compared to cigarettes, I have no doubts in my mind that this is a safer alternative.
The FDA has spoken out against these devices since they have not been approved by the FDA for any sort of medical use (quitting smoking), and they have not been proven over the long-term to be safer. Most people would say that this has to do with pressure from the cigarette companies. You can make up your mind about that.
Some of the people who are against them say that there are other chemicals (ethylene glycol, a.k.a. antifreeze) that are present in some of these solutions which make them inherent unsafe. Ethylene glycol can be very poisonous and often deadly. However, this is when it is ingested in large quantities. I have no sources for you, but some googling and textbook referencing convinced me that the amount which could be present is no health hazard. I'd buy an E-cigarette if I had any money.