Do water pipes drive anyone else nuts? It seems completely unpredictable how new pipes are going to
affect the water flow.

How do you mean? Big pipes link to zones and buildings. A zone conducts water through it - provided it is developed. Water usage is slightly more difficult, but higher density means more water.

I generally ended up building pipes under my main roads.

The only problem with simcity is that it usually pushes you into New World grid style designs rather than the more organic settlements we have in the UK.

To be fair, the earliest your city can be founded is in 1900 so even by new world standards the city you're playing in this game is relatively young.

Don't get me wrong - it's not a massive problem for me - I think it's mainly down to the limitations of the engine - being grid based. It's still a fantastic game - sorry Maxis - "Software Toy"

You don't have enough water to fill your grid is all.

though the same thing BlaneckW said.

If your watergrid is connected with pumps by big pipes and still does not fill, you got to build more pumps near water.
There will be a "water shortage" message now and again.

Well the simcity engine automatically sets a city centre, and that centre will be the point from where the water flows outwards. Strange indeed, because this means that although the edges of the city may have nog access to water due to water shortage, building water pumps there won't have much effect. However, if you build the water pumps next to fresh water, you van easily connect them to the rest of your city. This should help control the water flow more easily.