Wouldn’t conditional be acceptable? “Would you like some water?”

"Voudriez-vous de l'eau" is acceptiable, if that's what you were thinking. It is actually more polite than simply "Voulez-vous de l'eau".

-- Chris (not a native speaker).

Hi Dominic, 

Not in this case, you would simply use the present tense in the question.

Vous voulez de l'eau ?

The polite answer might be to say ,

j'en voudrais bien merci. 

But the question doesn't need extra politeness, the fact you are offering water is enough. 

Hope this helps!