Right. A peliter is a small, generally flat white device which uses some pretty gruesome physics. It basically transfers heat from one side to the other.
It comprises of a hot side and a cold side. The cold side will generally be 70 degrees celcius or more colder than the hot side, so the idea is to cool the hot side down as much as possible, then put the cold side against your CPU core. Smaller peltiers (or TECs [ Thermo Electric Cooling devices ]) can be colled off pretty well just using a heatsink and a fan, much like you'd cool a CPU. But bigger pelts, with a greater ability to shift heat around, generally require water cooling to make the cold side any cooler than you could get your CPU with a fan.
Thats why most people using Pelts will use them in a water cooling setup. Its a separate piece of kit from the water block, but is generally used with one.
Help?