The basic rule that I go by is "try it out and see how it tastes." If distilled water gives you a good beer, then use it. Same for spring water or tap water. I use bottled spring water myself, and I'm happy with it - I like how it tastes, and I like the beer I get with it. But there are people who like how their beers come out using distilled.
Black Diamond Brewery
Think global, drink local.