Steam

Steam is generated by heating Water or Snow with Fire. This can be done manually with a Flamethrower or the napalm upgrade of the Rocket Launcher. Steam will rise up until it encounters a ceiling and pool there (like Water does on the floor). If there is no ceiling above the Steam, it will continue to rise until it reaches the Sky (an altitude slightly higher than you can fly), at which point it will condense back into Water and fall as rain.

Steam is the main way to move Water to the surface after you unlock the Flamethrower but before you unlock Pipes. By heating water with the Flamethrower, the Steam will rise through any passages or cracks to the surface, rise into the Sky then rain back down as Water. You can control the flow of the Steam as it rises with Blocks to direct it to where you want it to fall as rain.

Steam will rise until it encounters a ceiling then expand horizontally to make a flat pool of steam. Any extra Steam particles will skitter back and forth looking for a place it can rise. If it cannot find a place to rise to, it will condense after 30 seconds and fall as rain (even though it never reached the Sky).