Re: a couple of questions
How old is your baby?
I think it's totally okay to use formula or water to mix with the cereal, and probably okay to use plain Britta water rather than bottled. If you're freaked out about the possibility of pathogens in the water, you might want to boil some water and then keep it in a sealed glass bottle.
You might want to consider skipping the cereal altogether and going right to pureed veggies/fruits. I know cereal is marketed and sometimes even recommended as a first food, but there's really no good reason why you need to start with it. It's not the healthiest stuff- it's fortified with vitamins and minerals but other than that it's just plain starch. If I had to choose between feeding my kid a jar or pureed carrots and cereal, I'd pick the carrots.
I'm glad you don't want to let your baby cry it out. You might want to read Elizabeth Pantley's book The No-Cry Sleep Solution, which is full of gentle techniques to help your baby learn to sleep more independently. I found it quite helpful.
Coolest thing my big girl said recently: "How can you tell the world is moving when you are standing on it?"
Coolest thing my little girl sang recently: "I love dat one-two pupples!"