Air-cooled all the way. I had intended to go watercooling, but it turned out not to be necessary, The 3 GTX280's idle at about 46C and under load top out at about 68C - well within design parameters.
I usually run them overclocked to 650/1400/2400 with fan set to 100% while gaming. When not, I run them at stock speed with 70% fan.
Many have said that at 100% they sound like a vacuum cleaner, but I disagree. At 70%, they are drowned out by background noise in my house, and at 100% they're certainly audible - but not while playing with the sound turned up even a little.
I hate to leave the fans on "Auto", since the stupid Nvidia algorithm lets the cards heat up to a ridiculous degree (over 80C) before it will really cut in the fans. So you end up with this endless cycling of fan speed and temps.
I can play Warhead all day long with the cards oc'ed and the fan on 70% without breaking 75C. Just can't see why I would need to bother with the H2O...