Data Center Knowledge has a story by Rich Miller about the vast amount of water consumed by server farms. Most of the water for cooling is lost to evaporation. It discusses different methods of dealing with this.

http://www.datacenterknowledge.com/archives/2009/04/09/data-centers-move-to-cut-water-waste/

Google has a YouTube video about their water treatment plant at their data center in Belgium. One of the byproducts is Google sludge.

YouTube video: http://www.youtube.com/watch?v=nPjZvFuUKN8