Yep, never, ever use tap water. Beyond all the other points, it is also much more conductive than distilled water, and if any leaks, you've screwed the pooch.
A good distilled water like Dasani and add about 5% anti-freeze for anti-bacterial growth. That's the cheapest and the best coolant for liquid cooling setup. I spent $12 for a litre of non-electrical conductive coolant for my loop. Even though it's not as good as water/glycol mixture for it's about 2c-3c degrees higher, it's perfectly safe for my loop and my system. If your system has a low flow rate pump then forget about them non-electrical conductive coolants as it is thicker than water/glycol (anti-freeze) mix and may restrict the flow. There is that Fluid XP+ that is non-electrical conductive, lubricant, anti-microbial growth and has the same viscosity as that of water and it's thermal properties. But it's price is around $30 and may not justify it's performance. So if this is your first setup then hook up the loop and test it outside the case for at least 24 hours making sure it's working well and do not have any leaks.
I don't really consider Dasani as "distilled" water. It is bottled water and treated to remove heavy metals and organics but it is much more expensive than standard distilled water. A 4L jug of standard distilled water would cost as much as a 750ml bottle of Dasani.
There are a few bottled waters that are labeled as "distilled." Wether or not Dasani has some I dont know, but for 2 gallons of distilled water at the pharmacy I paid $2.89.
That's what I'm saying. I wouldn't use bottled water like Dasani in my system, too expensive. I think bottled water in general is a sham and don't buy it myself unless I'm stuck at an airport or something. My brita is good enough for me.