Well,I really did not want to get involved in this thread seeing as it had been covered nicely. I just really felt the need to address some of the erroneous and dangerous advice give recently.
Service grounding (a word I hate by the way) using grounding electrodes DOES NOT "ground" anything. Many folks think this has something to do with the safety ground and the third prong in receptacles. It does not.
Grounding & bonding are VERY complex issues and there are reams of information written. For the real purpose of the grounding electrode system in your house you can go to a site such as Mike Holt's or ECN and read some newsletters. I'll link one below.
For the purposes of that particular statement; service grounding by a METALLIC water pipe entering the structure, for new work and renovation/replacement. These rules are not retroactive.
If there is a metallic water pipe entering the building, AND it is in contact with earth at least 10' out, this pipe MUST be used as the primary grounding electrode. You must attach a GEC (grounding electrode conductor) within 5' of where the pipe enters the structure. Also, any removable meters, plastic filters, etc, that can/do breaker the electrical continuity of the piping system, must be jumpered around.
This GEC must be sized according to NEC Table 250.66
Even with this electrode, a supplemental electrode(s) must be installed. Typically this is a ground rod, or two, driven outside.
In the above case, no additional water bond is required. The GEC serves both purposes.
If the water pipe entering the house is non-metallic, then we still must BOND the metallic water piping system. The bond wire is also sized by Table 250.66.
See NEC 250.104(A)(1)