Hmmm I know we have like covered this topic in here very thoroughly...i suggest doing a search
The CAI *does* make more HP...becuase of the resonating effect of the long tube...and a bit of denser air.
Many people (including me) do worry about hydrolock with the engine. It only takes a little water to do it. However, there have been many people on here that have CAIs and have driven in rain, through standing water and have never had a problem. I would think if you keep your fender liners on you would never have a prob, especially with the AEM bypass valve. I know the AEM bypass will not fit on some CAIs so do your research.