Why is there water around my air conditioner?

This could be good or bad news. If the water is due to ice in and around your air conditioner, it's bad. See question #1. If the water is due to condensation from cold refrigerant lines you should be fine. The air conditioning system, when fully charged with refrigerant has a very cold copper line. This is the larger, insulated, suction line on the air conditioner. It's no different than if you set a glass of ice tea outside, the glass is going to sweat. Well, so is the cold copper line. As long as the A/C is cooling okay you should have nothing to worry about.