Many city bikes are made without braze-ons for bottle cages on the frame. This is probably because they don't look right with roadbike-style bottle cages, and manufacturers expect that trips on these bikes will be short anyhow. But what about those of us with longer commutes, especially in the summer heat and humidity? While clamp-on bottle cages exist that can be fitted onto the frame without braze-ons, the shape of the frame can make attaching them challenging and unsightly.
With upright handlebars, it is also not exactly convenient to reach all the way down to the down tube or seat tube for the water bottle. Most seem to prefer alternative solutions.
DIY handlebar setups are popular, and above is the Co-Habitant's somewhat eccentric solution. He modified regular water bottle cages to clamp onto the bars and can have up to two water bottles at his fingertips as he rides. For him this setup works nicely, though others might find it cluttered - particularly on bikes with not a great deal of room in the "cockpit."
A more conventional solution is to install a coffee cup holder, the likes of which several manufacturers are producing now. From what I hear, the quality of these holders varies from one brand to another, and they do not fit all water bottles. But if you get one of the good ones and it does fit your bottle of choice, they can work great.
Personally, I prefer to have as few items attached to my handlebars as possible and would rather carry water in my bag or basket. When I ride a full-sized city bike, I keep a bottle of water in my pannier and keep the pannier unzipped for easy access. When I get thirsty en route, I reach for the water when stopped at a red light, drink, then put the bottle back when done. I don't need to turn around in order to do this and kind of know where it is by feel.
On the Brompton it is easier still, because the Carradice front bag has stiff rider-facing pockets that are the exact size of a small Klean Kanteen bottle. I can reach the bottle, drink from it, and put it back in the pocket without having to stop the bike. Of all the different ways I have carried water on a city bike, I think I prefer this front pocket option most of all. Not only is the water bottle close at hand, but I then easily can take it with me once off the bike without having to carry it in my hand.
Do you feel the need to carry water when riding for transportation? Do you think city bikes should come with provisions for doing so? Please share any clever systems you've come up with as well.