BTW - the cause of the fade is that the water boiling will create bubbles in the brake fluid at the pad' date=' thus reducing the hydraulic performance of the fluid and therefore inducing the fade.

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Gotcha. So due, as I guessed earlier, to the bubbles being compressible and therefore volume of (fluid+bubbles) being reduced rather than pressure of (fluid+bubbles) increasing and actuating the pads.

So the reason that having water in your brake fluid (apart from possible corrosion of internal parts) is "BAD" is that the water will vaporize at a lower temperature than the fluid should, and create these bubbles. I expect that bubbles would also eventually occur even in water-free fluid, but at a higher temperature.

What have I started? - I started off asking a simple Q, and now my brain hurts because I've been trying to get my head around all this chemistry / physics mumbo jumbo... No offence to science types, but I'm more an arithmetic/economic/literate type. - science baffles me sometimes.