Adding a water pan to a smoker can feel counter-intuitive. However, some smokers, like the Weber Smokey Mountain (WSM) as well as most electric smokers are designed to use one.
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There are two main reasons that people use a water pan in a smoker:
While these are the main reasons people use a water pan, there are additional benefits. Namely, the water pan creates a radiant heat source - also works to block/deflect heat. The humidity also results in condensation causing more smoke gases/particles to adhere to the meat.
Humidity is the measure of the total amount of water vapor in the air. Water vapor enters the atmosphere by evaporating liquid water - hence a water pan. The higher the temperature, the more water vapor the air can hold.
Humidity is an important factor inside of smokers, however it is often overlooked. The major benefit of a humid environment is to ensure that the meat doesn't dry out.
A related process to humidity, evaporation, and condensation is evaporative cooling - meat sweating. This process is also part of human physiology - Our bodies sweat in order to effectively cool down. When water vapor evaporates inside the smoker's environment, some of it will condense on the meat which further helps it to cool down. Meaning, more time for connective tissues and fats to render.
Note: This process is the same reason people will Texas crutch (wrap their meat). It combats the moisture wicking properties of the meat.
Some of this water vapor can also mix with the gases/particles found in the wood's smoke which then sticks to the meat. It also helps in the creation of the "smoke ring" - interaction of myoglobin and nitric oxide and carbon monoxide.
It should be noted that larger cuts and quantities of meat can also release a significant amount of water during the cooking process. As you might expect, the water is vaporized and creates moisture within the smoke chamber. Even in these circumstances, it can't hurt to add a water pan to introduce even more moisture and reap the other benefits of their inclusion.
The boiling point of water is 212 F (373.1K) meaning, water can never get hotter - At standard pressure and a boiling point of 212 F, liquid water is considered unstable and will evaporate rapidly from the surface in the form of water vapor - referred to as the enthalpy of vaporization.
This is obviously beneficial if you smoke your meat at lower temperature ranges like 225 F; It will make maintaining these temperatures much easier since the water pan is boiling at 212 F. Opening and closing your smoker will have a smaller impact on temperature swing and if your temperatures drop below a set temperature like 250, it will make reaching that temperature easier.
Water is considered to be a slow conductor of heat. With that said, it also has a better heat carrying capacity than air (roughly 4.23x more); Meaning water can hold onto heat better than air - It also takes a significant amount of heat energy to boil water (2257 kJ/kg). This is important to understand because if your smoker spikes in temperature, the water will continue to boil and consume extra heat energy which keeps the temperature down. A number of sources will refer to this as a "heat sink" as it helps to moderate temperature.
The water pan also creates an indirect cooking environment; There is a big reason most professional pitmasters make use of offset smokers - the firebox is literally offset from the smoke chamber. The pan also acts as a baffle as it deflects flame from the meat. Indirect heat coupled with a heat baffle means that your meat isn't burned.
Due to the points above, you should only add water that is hot as cold water will cause the smoker to cool down. Granted, if you need to cool down smoker you could add cold water.
The name water pan implies that water should be used. However, a number of sources note to use beer, wine, or apple juice. While these liquids can certainly evaporate and result in aromatic compounds, they have few flavor compounds that are perceivable.
Spritzing can technically accomplish the same thing - adding moisture to the meat. However, the problem is sort of the same. You're taking a small amount of liquid and spritzing it on the surface of the meat; This cools the meat down and can add a small amount of flavor as the surface becomes wet, which attracts the molecules from smoke. A liquid like apple-juice also contains sugars that can further caramelize the surface of the meat.
Just to re-iterate, you're taking a water-based spray and applying it to an oily surface. Meaning, some will likely stick to the surface, and some will roll-off; This is because water (H2O) is held together by hydrogen bonds. The oils/fats are nonpolar meaning they're not attracted to polarity of the water molecules - they're hydrophobic resulting in some beading.
This isn't to say though that a drip pan can't be used to collect drippings like oils and sugars to create a stock.
It's important to note that a drip pan can sometimes be a water pan. A drip pan collects the juices that drip from the meat. It also prevents these juices from hitting the flame which can cause flare-ups. However, these same juices/fat may hinder evaporation - the oils are less dense than water and will collect on the surface. It's more ideal to have a dedicated drip-pan and a dedicated water pan - one to collect juices and one to add as much moisture as possible to the smoke chamber.
If your goal is to collect these drippings for stock, you should be re-adding hot water. If all the water were to evaporate, these flavor components will likely char and/or caramelize.
It is usually recommended to place the water pan above the hottest place on your cooker so that more liquid will evaporate. This placement also acts as a baffle/deflector and generates radiant heat.
This is heavily smoker dependent. Again, some smokers like the Weber Smokey Mountain (also called a bullet smoker) have a dedicated location for the water pan; The same could be said for the majority of electric smokers.
Learn More: The Different Types of Smokers
There are also some smokers, like a Weber kettle, where space might be limited. Due to charcoal arrangements - like the charcoal snake - you may have no choice but to place the water pan below the food.
As with any topic in barbecue, there are both people for and against using a water pan. The main reasons people don't use water-pans are: