As reported on the BBC

I mention this as a staple of Sci-fi and Sci-fi RPG was the idea of a star ship taking on water to get fuel.

__________________
Fame, glory adventure, a cyber warrior craves not these things.

Here is to seeing more.

Good. Now they just need to slap a reactor onto that set-up, and they'll be in business!

__________________
Quaeso quousque humi defixa tua mens erit? Nonne aspicis, quae in templa veneris?

When hydrogen is burned as fuel in a vehicle, what are its byproducts? The real question I'm asking is can we ever reach a point where were using up too much water to fuel our generators and damaging the climate that way?

Well, the byproduct would be water, wouldn't it? I mean, burning is just oxidation, and water is simply H₂O.

__________________
Quaeso quousque humi defixa tua mens erit? Nonne aspicis, quae in templa veneris?

Hydrogen produced from water in schemes like this is actually an energy storage system; hydrogen is split off from water using electricity (producing oxygen as a byproduct) and stored as a fuel, then burnt in a combustion engine using atmospheric oxygen releasing energy and producing water as waste product.
This process is somewhat inefficient; less energy is produced by the combustion of the hydrogen than it takes to produce it in the first place- but it is still worth doing, as hydrogen is a fairly convenient way of storing energy (pity there isn't any effiecient way to produce kerosine by a similar method).

On the other hand, when a spaceship takes on water for fuel in science fiction or in an RPG it usually is going to use the hydrogen (or perhaps just the deuterium fraction) for a fusion reaction; this actually is a primary source of energy, rather than a storage system, and at the end of the process the hydrogen is gone, converted into helium and energy.

Alternatively the water might be used as a propellant; this means it is heated up in some way (perhaps by fusion or fission or even annihilation, or maybe some other way) and expands until it is expelled off in a particular direction, which propels the spacecraft in the opposite direction. This use of water does not produce energy, but it is an efficient use of energy produced by other means.

__________________
Orion's Arm . The Starlark . Voices: Future Tense- Novella Contest Issue! . OA Flickr set