Of the countless water and ice-type pokemon, only a few of them are actually made of H2O, instead of merely being able to command it and live in such a climate. And of those few, it is only Vaporeon which can render itself so indistinguishable from water that it can actually undergo the water cycle intact; there is good reason that this is the pokemon from which water vapor gets its name.
When the temparature drops below freezing, they turn into Glaceon, which scientists are beginning to regard as an alternate Vaporeon form (although they say there is a rock in Sinnoh where more stable Glaceon which do not melt are born); when it rises above the boiling point of water, they disappear into steam, and occasionally their outline can be seen within the steam clouds. Boiling a Vaporeon is not fatal, like it is for most water-type pokemon. Instead, they undergo condensation, form into clouds, and literally drop out of the sky during rain storms, occasionally landing on unfortunate passersby.
This is not the only way in which their ability can cause trouble. At times, they land into reservoirs, and while sleeping are brought through water pipes into people's homes. At times people look at their cup of tap water to find a fin-eared face staring at them before it gets out and splashes them, at times they scream in embarrassment as a pokemon materializes in their bathtub, and at times the humans are fine, but the Vaporeon are sent into a spiral of dizziness in a washing machine.
All involved (their trainers especially) agree that this ability can be a real source of annoyance, but one should keep in mind that this is also what give Vaporeon their enormous power in battles which take place in the water.