FWIW, I've always run hose water in my cooling systems on my vehicles and farm equipment....
I've had most of my stuff between 10 and 20 years and have had zero radiator and wasting problems...I run propylene glycol at a ratio just slightly higher than called for and run an anti-cavitation package in my diesels (generator, tractor, truck)
Haven't noticed any pitting problems with the Edelbrocks on the race car....and who knows what kind of water we see at the tracks I've been to...
I'd say, if you can afford to run distilled water in your vehicles, by all means do so....I'd clean out my local grocery store (and my wallet) if I used it in all of mine...coolant's expensive enough..
I upgraded the coolant in my 70 Mach 1 to extended life coolant. It is suppose to have better heat transfer characteristics than the conventional coolant and as mentioned, is better for aluminum components. It depends on the quality of the water in your area, but I used distilled water for the refill. If you decide to refill with the extended life type, Texaco offers a premixed product which already has the distilled water in it. It was unavailable at the time where I live, so I opted for the GM equivalent "Dexcool" extended life coolant. So far the motor doesn't know it has GM fluid in it.
If you have a water softener, definitely tap water; nearly all mineral impurities are being exchanged for a miniscule amount of sodium (potassium if you've using it because of high blood pressure, etc).
If you have really hard water (leaves heavy soap scum in tubs, etc), heavy sulfur content (water that sits for a day or so smells somewhat like rotten eggs), or a reddish tint to the water - especially the hot water (high iron content), then whether to use tap water depends on the following:
If you religiously flush & refresh your cooling system yearly, use tap water.
If you forget about your cooling system for years on end, used distilled, or at least a 50/50 mix of tap and distilled.
As cam said, generally tap water is not going to cause you any problems unless you have some really bad water. And really bad water won't cause problems unless you never change it out.
If you don't know what kind of water you have, here's a layman's way of figuring out what to use (assuming you've been in your house for 3 or more years):
If you haven't had to replace your hot water heater or dishwasher in the past 3 years, your water is probably fine.