I could have posted this as a comment to Bach's very well documented answer. However, as it is rather long, I think that if you sum up those 2 answers you can make a more comprehensive one.
First of all, we have to take into account that this event is taking place at Miztpah. Most of the sources I read would emphasize that Mitzpah was already a place where Israel had gathered on a significant and solemn occasions. Also the use of words like "before the Lord" may indicate that this ritual was part of an offering or sacrifice made “to the Lord”. (see J. Woodhouse, 1 Samuel: Looking for a leader. Preaching the Word, Crossway Books, Wheaton, IL, 2008, p. 129) I think this 2 points indicate the fact that the pouring out of water before the Lord is part of a ritual.
On the other hand, Rashi could be very inspired to think that this action is a metaphorical one, meaning humility before the Lord:
Rashi on I Samuel 7:6:1 ... we are before You like these poured out waters.
Compare this with ...
Lamentations 2:19 Arise, cry out in the night, as the watches of the night begin; pour out your heart like water in the presence of the
Gathering on a significant place, metaphorical and symbolical actions are all together part of any ritual.
So we have this very complex mixture of
sorrow (the Ark was lost for such a long time),
fasting (1 Samuel 7:6 they fasted that day) and
desire to seek God (1 Samuel 7:4 the Israelites removed the
Baalim and Ashtaroth and they served the LORD alone)
Now if we match the pouring out of water with nr. 2 above, it is possible that the people were simply denying themselves water to drink, just as they denied themselves food by fasting. (se allso R. L. Omanson & J. Ellington, A handbook on the first book of Samuel. UBS handbook series, United Bible Societies, New York, 2001, p. 154).
The same idea about fasting as abstaining from food and drink, also in Leo the Great, Sermon 39 (Recension a) 1.2.