Thermoelectric cooling is pretty powerful stuff when you match it with a watercooling loop. You are using a peltier junction (also known as a thermocouple) to sit between the CPU and the water block. The thermocouple is made of two differing metals that when current is passed through its circuit, one side becomes hot and the other side become cold. The difference in temperature depends on the types of metals use, the purity of the metals, and the amount of current passed through the circuit. The amount of electrical energy used by the junction will always exceed the amount of heat energy removed.
Using thermoelectric cooling (and phase-change cooling as well), you have the potential of reaching sub-ambient temperatures, and if you cool to below the dew point of your environment, you will get condensation on all exposed uninsulated parts (think, glass of icewater on a muggy day). Hence, you need to insulate exposed metal parts, use silicone conformal coating on any exposed boards, and use dielectric grease for any parts you can't insulate (i.e., the space between the pins on your CPU). This adds a much higher degree of complexity to any build.
If you use just distilled water and biocide in your watercooling loop, the chances of you frying your computer if you develop a leak are very slim. Sure, it may short if it gets wet enough, but your computer should shut down. Once it is dry, your computer should boot right up, right as rain. The operative word there is "should." As with anything, you take certain risks, that things will not always happen as they should.
As for the recommended kit...I am so out of the loop on what is hot lately with the WCers. Last I checked, I was using Feser, Black Ice and Swiftech radiators. Go with a Liang D series for your pump (Swiftech uses rebranded Liang pumps, for instance). Some people like reservoirs, though you can run a loop without one if you use a T-line to bleed the air out of your loop. As far as CPU/GPU blocks, these change month to month depending on the socket type of your processor or make and model of your graphics card. For CPU, look for a water block that uses microjet-impingement that provides the best chance of tranferring heat from the metal of the block to the water. As for GPU cooling blocks...Conundrum has pointed out to me that memory has gotten so clocked lately that you HAVE to go with full coverage blocks to get any more out of it. As for mainboard/MOSFET cooling (even ram cooling), the generally held best practice as of right now is to put active cooling HSF on them and let them cool on air rather than try to add them to your loop, since you would only be adding more impingement to your loop without much gain.
Your research will entail as to what build is right for you, what order you want devices to sit in your loop for best effect. You will also need to research what is available to you within your budget. And finally, once you get all the parts gathered together, how to go about building your cooling loop.
Again, good luck!