This is a quote from the September 2008 MB StarTuned magazine.
"Water Quality
In this article, we discussed proper cooling
system service procedures, anti-corrosion antifreeze
and tools to test and exchange the
coolant. One more subject we need to discuss is
something we very often take for granted. That is
water supply. "City" water for drinking is treated.
It contains fluoride or chloride salts due to the
treatment, so it is not desirable to mix it with
coolant. Do not use this, or hard water, in
Mercedes-Benz cooling systems. In the odd
chance you have a supply of spring water, either
bottled or from a well, do not use this, either.
Bottled water is not regulated and probably
contains minerals that can react with engine
components, and also acts as an abrasive when
passing through the cooling system. Instead,
use distilled water. It is the best to use since it
contains no additives. The slight additional cost
of distilled water should not significantly increase
the cost of the overall cooling system service
and eliminates harmful contaminants."