Frag_Dog, absolutly correct. Although if you're prepared to wait for 2+ months, I'd consider adding all the sugar you would have put in bottles into the keg and naturally carbonating the keg (the first glass may have sediment, but you will use less CO2 this way.
As for water. My wife was into sparkling water. So I put a keg of it on top. Then she decided she liked tonic water better. So it turns out I drink the sparkling water with cordial (lemon lime and bitters or ginger beer mostly) and she drinks the tonic water in the inside fridge. Ideally water should be gassed at a higher pressure than beer. I do it at the same pressure, but at some point I'd like to buy the add on for me regulator to make it a dual pressure reg (its a micromatic, some of the site sponsors sell them although I got mine from the LHBS). Maybe something to keep in mind when you buy your setup (whether you buy a dual pressure to start or make sure its upgradable latter)
As for water. My wife was into sparkling water. So I put a keg of it on top. Then she decided she liked tonic water better. So it turns out I drink the sparkling water with cordial (lemon lime and bitters or ginger beer mostly) and she drinks the tonic water in the inside fridge. Ideally water should be gassed at a higher pressure than beer. I do it at the same pressure, but at some point I'd like to buy the add on for me regulator to make it a dual pressure reg (its a micromatic, some of the site sponsors sell them although I got mine from the LHBS). Maybe something to keep in mind when you buy your setup (whether you buy a dual pressure to start or make sure its upgradable latter)