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. That is why sweating is such a good way to cool off, it takes a lot of heat to evaporate a little sweat, and much of it comes from your body. Likewise, it takes the removal of a lot of energy to freeze water. This means that organisms can readily lose heat to water, much more readily than to air. You know this if you have ever been in a pool that is kept at 75 F. If you are not active, you will feel cold in a short period of time.