It's not really bad, it just doesn't have much in it. It doesn't really matter much for extract brewing- the extract has the minerals in it from when it was made. But for partial mash and all-grain brewing, it's not good at all. Reverse osmosis water is good, and is bottled spring water. I use my tap water.
__________________ Broken Leg Brewery
Giving beer a leg to stand on since 2006
The general rule of thumb is, if your water tastes good, it's a good start to making good beer. Taste it - if it tastes OK to you, then use it. In my experience, distilled water tastes sort of flat so I avoid it.