http://www.fisheaters.com/water.html has a nice web page on Holy Water, its history and usage.
My understanding of Holy Water is that it is an aid, like the Crucifix or Cross is an aid. It is not God in itself, but aids us in our striving towards God.
The article on the link discusses baptism at length, and the import of water in that context. Thank you again!
For the Lurkers, here are some passages which show the difference between baptism by water and baptism by the Holy Spirit:
Jesus answered, Verily, verily, I say unto thee, Except a man be born of water and [of] the Spirit, he cannot enter into the kingdom of God. That which is born of the flesh is flesh; and that which is born of the Spirit is spirit. John 3:5-6
Then Peter said unto them, Repent, and be baptized every one of you in the name of Jesus Christ for the remission of sins, and ye shall receive the gift of the Holy Ghost. Acts 2:38
Can any man forbid water, that these should not be baptized, which have received the Holy Ghost as well as we? Acts 10:47
And as I began to speak, the Holy Ghost fell on them, as on us at the beginning. Then remembered I the word of the Lord, how that he said, John indeed baptized with water; but ye shall be baptized with the Holy Ghost. Acts 11:15-16
And it came to pass, that, while Apollos was at Corinth, Paul having passed through the upper coasts came to Ephesus: and finding certain disciples, He said unto them, Have ye received the Holy Ghost since ye believed? And they said unto him, We have not so much as heard whether there be any Holy Ghost. And he said unto them, Unto what then were ye baptized? And they said, Unto John's baptism. Then said Paul, John verily baptized with the baptism of repentance, saying unto the people, that they should believe on him which should come after him, that is, on Christ Jesus. When they heard [this], they were baptized in the name of the Lord Jesus. And when Paul had laid [his] hands upon them, the Holy Ghost came on them; and they spake with tongues, and prophesied. Acts 19:1-6
Therefore we are buried with him by baptism into death: that like as Christ was raised up from the dead by the glory of the Father, even so we also should walk in newness of life. Romans 6:4
For by one Spirit are we all baptized into one body, whether [we be] Jews or Gentiles, whether [we be] bond or free; and have been all made to drink into one Spirit. I Cor 12:13