Hiya!
First the water issue.. I've been told by my doc that giving water is not necessary because LOs quench their thirst with breast milk.
We do, however, give Mateo chamomile tea (no sugar). I offer it to him when we are out for walks just in case he's hot/thirsty. He takes a couple of sips here and there, and it doesn't impact his breasfeeding.
As for cereal, I was told to stay away from cereals that have formula in them since Mateo is breast fed. Milupa has formula in it, and if your baby has NEVER been exposed to formula (cow's milk) then just go slowly to watch for any allergic reactions. We give Mateo Healthy Times Organic Cereals (brown rice, barley, oatmeal). I mix it with Breast Milk and/or water or cham tea, and so far all is going well.
Good luck,
Nay