Water -- by itself -- does not damage electronics. I have read cases where trying to use the electronics while still wet has cause some short circuitry, but that is rare.
Blow drying a drenched computer keyboard or iPod, in this case, should fix the problem most of the time. I don't suggest drenching your favorite electronic device to prove me wrong... but I've been saved a few times by the blow dryer.
When the water is mixed with sugar or soap, etc. then things change. The residue from the sugar and or soap stays even after the device has been dried.
I once dumped an entire can of coke in my keyboard. I was pretty upset. I tried to let it dry and use it, but it didn't work. A friend suggested that I drench it in water to wash out the sugar. Figuring I had nothing to lose, I did it. To my surprise it worked. The water completely removed the sugar and after the device was dried everything returned to normal.