Before dismissing this idea completely, the basis IS actually sound
http://en.wikipedia.org/wiki/Hydrogen_fuel_enhancement
The reason I point this out, is because I actually worked on a project with a friend to create a hydrogen injected race truck for the Baja 1000. The hydrogen system and many other things were designed before the project ran out of funding. The basic workings of it did include pouring straight water into a "fuel cell" which it then converted to hydrogen. That said, fuel economy was not the goal, we were doing to to increase horsepower.
NOW THAT SAID
The equipment required to do this was WAYYYY WAYYYY WAYYYY more than a "battery sized box" It was pretty extensive, and would have required the crew to treat each tank of fuel with a special additive, there was a lot of electronics behind it as well which was all run off a laptop in the car that required attention to ensure it was always working right (the plan for us was to have a co-driver monitoring the system). It required way more water than a "cup of water every 2000 miles". The claim of taking vehicles to "near zero-emissions"... umm err no, I am not a scientist nor was I one on that project but while emissions would be reduced a bit, you're still primarily burning fuel.
So in the end, the principle is sound, but yes I'd say this is still a scam.