Chris,
I think it's correct to say that water injection is like nitrous, but only as far as cooling down the air inlet temperature. Water has oxygen in it, of course, but it is too stable to really add any oxygen to the combustion since it doesn't burn. The instant boiling of the water will also add to the expansion of the gases. They have some pretty decent descriptions on how it works around the web. Here's a good one:
http://www.rallycars.com/Cars/WaterInjection.html