I watercooled my Athlon XP 2200 this last weekend. I was methodical:
Every step, I did outside the computer first. I hooked up the system to the waterblock and ran it for hours to look for leaks before installing it. Before I took it apart, I purged it w/ air so it wouldn't drip when I was running the tubes.
I install it, then do an air test to check for leaks.
Then I add water and run it without power to the CPU for an hour, no leaks.
I take it apart to add some different fittings that will have better flow, and I'm proud that the whole time there wasn't even a drop on the case.
So I have the system out on my kitchen table while I check and re-check connections and fittings to ensure there isn't a leak. My wife is watering the plants behind me.
She turns around, swinging the watering can in front of her, and neatly deposits about a pint of water + miracle grow right in the middle of my RAM, on my CPU, and in PCI slots.
After a day of soaking up water and using air dusters to blow water out of nooks and crannies, I finally have my system up again and running. No permanent damage, but my system re-flashed its BIOS* because of a checksum error when it first started. Since then, everything has been fine.
(* My mobo (GA-7XVRP) has a normal BIOS, then a non-flashable copy hardwired in that will automatically restore when there's a critical problem with the BIOS itself. Neat! I don't have to worry about a bad BIOS flash knocking me out of action.)