well i think i was thinking of the example of the panting dog. in that case the water actually evaporates and there you're transforming the heat energy into chemical energy of the vapor. i'm not sure how it's done for machinery such as computers, actually. maybe i should check that up again.

i'd say the difference between convection (moving air) and water cooling is the difference in the velocity of the medium. because with water cooling, the water can be practically standing still, no pumping necessary. like when you have a hot tea, it evaporates water and that cools it down. that does not mean that the water actually moves in the cup, though. so that differentiates it from typical convection.