Yeah, it's a definite concern w/ CAI's because they sit so low- some guys fab a splash guard, and some kits (I know the K&N does) come with a "sock" to help prevent it. You can also buy a bypass valve that opens when water enters the intake, preventing the water from getting to the turbo/manifold (depending on whether or not you have a turbo) for about $65, but I've heard it decreases performance.
If you're really worried about it, just go with a short ram.
I live in the NW, and I'm not really worried about putting one on my car. Just don't go fording any streams and you should be fine.

 

To hydro lock the air filter would have to be almost completely submerged in water before it would start to pull it up into the engine. No one should ever be in water deep enough to do that anyway. It would have to be at least half way up to the side marker light for this to happen. Any water that splashes onto the filter is harmless unless your hitting a puddle that is fairly deep and splashes water way up into the air, because it is oil soaked and will repell the water. The only way water can get past the filter and into the engine is in a hydrolock type situation.

If you get the K&N Typhoon CAI you get a solution to this possible problem. It comes in two seperate parts and you can put the filter on the upper part and use it as a short ram if your worried about it. Or you can do what I do and just avoid water thats deep enough to come into the car. If I come upon an if'y situation with no other options but to go through it, I will simply take the hose loose that joins the upper and lower pipes and slide it down so that it will pull in the air as if it were a short ram, thats why I have the allen wrench that came with the CAI kit in the car. If won't be able to filter out the air this way, but it's would just be done long enough to get through the situation. Here is a picture of my K&N Typhoon CAI, you can plainly see the blue hose that connects the upper and lower pipes that I am refering to.

[IMG]local://upfiles/193/Ay734478742.jpg[/IMG]

 

That has relieved my worries. There no where to submers my car like that around here except maybe a lake. Although it does frequent with heavy rain, which is what hadf me going. Didn't want to be splashing water up and it slowly build over time into a problem.

 

If you get and install one you will know what I'm talking about as far as how deep the water would have to be and how much water would have to splash up at once to cause this problem.