The problem with used rock is that you really have no idea what condition it's in. Often people sell their rock because they're shutting down the tank, often due to problems. Did they have a huge algae problem? Is the rock going to leach nutrients back into your tank for the next 2 years? Does it have pests? Did they screw up and treat with meds that adsorbed into the rock?
Sure, you can save a few bucks now, but what will it cost you down the road? I've seen people with complete crap for rock that they spend a couple hours scrubbing with a brush to remove hair algae, aptasia, etc. So you look at it, and the rock appears fine, but that problem will come right back.
Since live rock is the corner stone to a successful reef tank, I always recommend new rock. If you can't afford all new live stuff, mix it with some of the dry products available, it's often half the cost.
As for water, again, I always recommend RO water, but people do successfully run tanks in Calgary (and elsewhere) using treated tap water.
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Brad
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