Vinegar will work, if the water spots are recent and not too badly etched in.
The best thing I've found is "0000" (4 zeros) steel wool. You can buy it at a hardware store (cheap). Use it with any window cleaner you like for some lubrication, and get to work -- it's a lot of work by hand, but it does not leave any scratches in the glass.
I read about this on some detailing forum; google it for more info than you could possibly want...