The source of a water stain is often something simple; a leak from a heating appliance, plumbing leak or water which has come through the ceiling. These leaks leave behind mineral deposits which are dry, discoloured and often smell. This doesn't look good on the wall at all.
Condensation occurs when hot, moist air hits cold, dry air. This meeting causes water droplets to form on the cold surfaces (like your walls). This kind of moisture is what you'll find on the bathroom walls after a super-hot shower.