Primarily, organisms use water in its liquid or aqueous form. Water has some interesting physical properties that have consequences for life. Water is most dense when it is at about 4 C, and it is considerably less dense as ice. This means that water expands when it freezes, and it also floats on liquid water. Because most fluids in organisms are primarily water, freezing can cause extensive damage.
Organisms lower the freezing point by adding solutes, sort of like antifreeze.
Another interesting aspect of water is its ability to dissolve lots of different compounds. If you have ever had iced tea in the south, you realize just how much sugar can be dissolved in it. The ability to dissolve things is useful for organisms because it allows the organism to obtain nutrients that may be bound to larger compounds, and it provides a means to transport compounds throughout the body. Water also has a great capacity to resist change. It takes a lot of energy to vaporize even a gram of water.