Fluid Pipes are used with RedPower pumps to transport any general liquid (Water, Lava, Oil and possibly Fuel). The fluid pipe can only connect to a grate, which is used to either suck in water or to deposit it, and the pump which powers the system.
While the distance that liquid travels in the pipe is seemingly infinite in SSP, there have been reports that fluid may move a finite distance in SMP. Reports of 16 blocks and 32 blocks are common.
Kasel: I figured out that by adding another pump along the pipe can extend the range in SMP. This may clear this up for those of you who haven't figured this out yet.