The question about Watercolor produced on paper or on the screen
is an interesting one.
If you look at the page I just loaded "Meetings at ARTfOCUS" you can see
that I used a watercolor filter in Photoshop on some of my portraits
taken with a digital Camera.My art consist on first taking the pictures
and then manipulate the filter to the way I do think it looks like a
proper watercolor.(Had I never done watercolors on paper, I would have
difficulties to finish it the best of my knowledge as an artist)

Any person,who has never done a watercolor on paper would probably
make a mess out of it to use such a filter.

One can certainly also paint a watercolor with the computer from scratch
and use add water in painter 5 or just use one transparent color after
another.Oil in computer painting works just about the same,just take the
proper brush to render it in oil painting.
We must understand that this is also digital work and probably more
resented then the fractals and abstracts and 3d works because they do
not compete with the traditional multi media works.
There are artists today,who can produce watercolors with the computer
they look like the works on paper on the screen. One might not be
able to see much difference between a Gigglé print on watercolor paper
and a work done on paper.
No need to say more about what is art and what is not. It always takes
an artist to visualize and render with as much control the final
product.
Most artists fight for their turf of technique they like to use after
they have reached as certain level of expertise in their chosen field.
The art critics usually find something to say about the expertise of
rendering more then about the choice of content.The art lovers are more
interested in content.
Hope you like to get my humble opinion on the state of Computer
Watercolor.
Cheers
Ansgard