(Most of this information is straight from a Red Cross pamphlet that I have.)
In addition to having a bad odor and taste, contaminated water can contain microorganisms that cause diseases such as dysentery, typhoid, and hepatitis. If you are not certain of your water's purity, be sure to treat it before using it for drinking, food preparation, or hygeine.
There are several ways to purify water. No way is perfect, and often the best solution is to just use a combination of methods.
Below are a few easy purification methods. These methods will kill most microbes but will not remove other contaminants such as heavy metals, salts, and most other chemicals. Before purifying your water, let any suspended particles settle to the bottom, or strain them through layers of paper towl or clean cloth.
Boiling. Boiling is the safest method of purifying water. Bring water to a rolling boil for 3-5 minutes, keeping in mind that some water will evaporate. Let the water cool before drinking.
Boiled water will taste better if you put oxygen back into it by pouring the water back and forth between two clean containers. This will also improve the taste of stored water. If you still don't like the taste of your water, go ahead and add powdered drink mix, if available, or add a pinch of salt to sweeten up the taste a bit.
Disinfection. You can use household liquid bleach to kill microorganisms. Use only regular household liquid bleach that contains 5.25 percent sodium hypochlorite. Do not use scented bleaches, colorsafe bleaches, or bleaches with added cleaners.
Add 16 drops of bleach per gallon of water, stir and let stand for 30 minutes. If the water does not have a slight bleach odor, repeat the dosage and let stand another 15 minutes.
The only agent used to purify water should be household liquid bleach. Other chemicals, such as iodine or water treatment products sold in camping or surplus stores that do not contain 5.25 percent sodium hypochlorite as the only active ingredient, are not recommended and should not be used (Iodine is not as effective as bleach, but it is better than nothing. However, bleach is so cheap and easy to store - get some!).
While the two methods described above will kill most microbes in water, distillation will remove microbes that resist these methods, and heavy metals, salts, and most other chemicals.
Distillation. Distillation involves boiling water and then collecting the vapor that condenses back to water. The condensed vapor will not include salt and other impurities. To distill, fill a pot halfway with water. Tie a cup to the handle on the pot's lid so that the cup will hang right-side-up when the lid is upside-down (make sure the cup is not dangling into the water) and boil the water for 20 minutes. The water that drips from the lid into the cup is distilled.
A few tips from wikihow.com:
Both bleach and iodine work much better in warm water.
A person needs at least a half gallon of water per day to survive, sometimes more (children, nursing mothers, people who are ill, and when the weather is hot, everyone).
Use purified water for brushing your teeth.
Water that's collected through condensation (such as from plants or soil) needs to be purified. The process of condensation leaves some sediments behind, but unless boiling temperature is reached, parasites and other harmful substances may still be in the water.
A few warnings:
Commercial filters made for tap water remove basic minerals to make it taste better. They do not remove parasites or other threats that are removed through in water treatment facilities. Check the label to be sure what you're getting.
People with thyroid problems should check with their doctors before using water treated with iodine.