The water system is not a bad thing as long as it is installed and functions correctly. It also does not necessarily affect the streetability of the truck. There are a whole bunch of factors that play into the streetability of the truck that are way more influential than the water system. If the engine actually needs the water system to keep it from melting down, then it is probably not the truck you want to start out with. You'll need to know more about diesels before you jump into a truck like that.
You can find all the info you need on this site if you'll take the time to look for it. There are guys in here that know way more than me. Use the search feature and read there posts and answers before you make any decisions.
That's my $.02