Are My Creatine Gains Just Water?
Most people gain weight so rapidly after starting to take creatine that logic tells you that the weight gain is almost all water. That may be largely true after you first begin taking it, but even then, the increase in weight appears to be proportional to the total weight gained.
Muscle is 73% water, so if you gain ten pounds from using creatine, about 7.3 pounds of that is water.
That being said, creatine does indeed cause cellular volumization and that's an important determinant of protein breakdown and protein synthesis in skeletal muscle (and other cell types, too). Working out turns on protein synthesis while simultaneously breaking down protein, but creatine shifts the balance towards protein synthesis.
Yes, creatine supplies an extra phosphate group to help regenerate ATP during high-intensity contractions, but cell volumization is an even more important cause of creatine's muscle-building effect.
Long-term use is a slightly different scenario because that's when creatine increases fat-free mass without a concomitant increase in total body water. Muscle fiber diameter goes up, along with strength, so long-term effects appear to be caused largely by increased muscle mass.
What Should I Look For in a Creatine Product?
Make sure it's from a reputable company. Don't buy the stuff in giant oil drum containers from drug stores or any warehouse clubs. Their stuff is likely adulterated or just plain low quality. If possible, look for something micronized. And good ol' creatine monohydrate is really all you need.