|Fig. 1: How water cooled nuclear power plants operate. (Source: Wikimedia Commons)|
Nuclear power plants are similar to fossil fuel burning power plants with the main difference being how the heat is generated. Nuclear reactors use radioactive decay whereas fossil-fuel plants burn resources like coal or gas.  Harnessing the power from each respective resource isn't exactly equal. Nuclear power plants are a little more taxing because of the need to manage the high heat and radioactivity from the nuclear power. In water cooled nuclear power plants, the water withdrawn from a variable water source is proportionate to the amount of steam being condensed.  This means that water evaporates faster from nuclear power plants than coal operated plants, making it slightly less efficient in using its resource than fossil-fuel plants.
The most common coolant used for cooling nuclear power plants is water. Nuclear power plants are often found in areas close to water so there is an abundant resource to draw from. Water also has properties such as a high specific thermal capacity, allowing it to absorb a lot of heat without increase dramatically in temperature. 
Looking at Fig. 1, water is pushed around the reactor core which creates steam which turns turbines in the generator in order to generate power. It's important that the loop of the coolant to be closed in order to ensure the amount of radioactivity in the coolant is kept at a minimum and kept withing the power plant itself. If nuclear material were to leak outside of the plant, there could be some huge issues.
Water isn't the only material being used for a coolant. According to a report on Generation IV Nuclear Energy Systems, elements such as helium, sodium, lead, and flouride salts have all been used to cool different types of reactors.  Granted, some of these coolants have not been used to large-scale power plants quite yet but it goes to show that water doesn't have to be the only solution. Researchers are constantly on the look out for materials that could potentially be more efficient in the cooling process.
© Dalton Schultz. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
 R. Goldstein and W. Smith, "Water and Sustainability (Vol. 3): U.S. Water Consumption for Power Production - The Next Half Century," Electric Power Research Institute, Technical Report 1006786, March 2002.
 "A Technology Roadmap for Generation IV Nuclear Energy Systems," U.S. Department of Energy Nuclear Energy Research Advisory Committee, GIF-001-00, December 2002.
 "GIF R&D Outlook for Generation IV Nuclear Energy Systems," GenIV Intl. Forum, 21 Aug 09.