Without water life is impossible. Without "drinkable" (liquid) water, life is still impossible. The problem with water in the universe is perhaps best depicted in Samuel Taylor Coleridge’s epic poem, The Rime of the Ancient Mariner: "Water, water every where / Nor any drop to drink."
Water is the second most abundant molecule in the universe (behind molecular hydrogen, H2). Water is ubiquitous. Interstellar molecular clouds are loaded with it, and these clouds are the maternity wards of the universe where new stars, planets, and comets are born.
Frozen water makes up 75-80 percent of any comet’s mass. As millions of comets orbit the Sun, they frequently collide with solar system bodies, depositing water upon them. And yet Earth is the only solar system body on which significant water (both internal water and water from comets) becomes and remains liquid. Most solar system bodies are so cold that this water remains frozen. Permanent frozen water can be seen on Mercury and is expected on the Moon in deep craters at the poles, where high walls keep sunlight from ever reaching the crater floor.
On Mars, however, the situation is different. Mars seems to possess far less water than the expected amount. The reason most likely lies in the fact that Mars’ rotation axis (unlike Earth’s) experiences radical changes in its tilt. It tips over by as much as 60° every few million years. When this tilting happens, whatever frozen water has accumulated at the poles gets exposed to temperatures warm enough to cause some melting; however, due to Mars’ thin atmosphere, the melting point and boiling point are the same. So sublimation (transition directly from solid to vapor, as with frozen carbon dioxide, or "dry ice," on Earth) usually occurs instead. And since Mars’ surface gravity is only 40 percent of Earth’s, water vapor in the Martian atmosphere eventually escapes to outer space. Thus, although Mars receives a steady supply of water from comets, it remains relatively dry.
If and when liquid water does appear on Mars, it most likely remains in liquid state for only a matter of seconds. Such a brief period offers no real benefit for sustaining life.
Where liquid water may exist in abundance is inside Europa, one of Jupiter’s large moons. Europa is 15 percent water. That is a huge proportion compared to Earth’s 0.02 percent. And because of Europa’s proximity to Jupiter, this water may be heated enough (by gravitational effects) to exist as ductile ice or even as liquid. However, it remains trapped inside an icy crust at least 19 kilometers thick. And though certain oxidants involved in prebiotic chemistry reside on Europa’s surface, the chances of their reaching the subsurface ocean are utterly remote. Neither is there a realistic possibility that Earth life landing (via meteoritic transport) on Europa’s surface could find its way down into Europa’s subsurface.
Water indeed exists "everywhere" in our solar system and beyond. It appears, though, that only on Earth can the water be exploited for life’s sustenance. To learn more about the connection between water and life, see Origins of Life: Biblical and Evolutionary Models Face Off (publisher’s release date: April 2004).