Wikipedia is full of examples of inventors throughout history who've claimed making a physics-busting discovery that will change the way we... ummm, water our gardens... forever. While water fueled cars may sound more akin to the mythological "perpetual motion machine" than science, the foundation of the logic is sound, which is the reason why so many people get suckered into believing that such a vehicle is possible. Using water as fuel would require the water itself be used up for it's energy, but these inventions only use water coupled with conductive plates or rods as an electrolyte, essentially making a battery. Let's be clear, a battery powered car is not a water powered car. Some engineers have also created what are essentially hydrogen powered cars that break H2O down into Hydrogen and Oxygen, using the hydrogen for power and the water as a by product, the issue here being that physics would still consider this a perpetual motion machine in the sense that you can't recover the same energy you put into the fuel cell, some is dissipated in friction, heat, etc. Also, the water itself, again, is not the fuel source but rather a source for the source, which brings us back to the inefficiency that would cause these sorts of vehicles to cost more to run than a traditional gas powered car. Of course, we could always just start building and importing more diesels, but that would mean we 'mericans would have to face up to the modern truth that diesels are quiet, fast and torque-y. Hell, next thing you know we might start buying more wagons instead of gas hungry SUV's.
If you want to read some of the science involved check out the Wikipedia links above, or just take our word for it that there is no such thing as a fucking water powered car. Need more proof? Check out this photo from the Genepax press release back in 2008 for promotion of their own water powered car. Maybe it's just my failure to understand the cultural idiosyncrasies of Japanese culture, but having Jason Voorhees acting as your corporate "Stig" doesn't do much for customer confidence.