There are a myriad of approaches to the problem, including conservation. I suggest we start simply. Figure out ways to reduce consumption: low flow toilets, low flow shower heads, take a navy or military shower, high efficiency appliances, maybe don't plant a yard of grass that requires a ton of watering.
Instead of spending a lot of money, there are simple steps we can take to reduce consumption. This video shows one of the cheapest and easiest ways to reuse water and keep your plants happy, graywater. You could spend money and take it a step further with a greywater (other spelling) system, but I suggest this is the best and easiest place to start.
Local and national talk radio host Ethan Bearman can be heard almost everyday on KSCO AM 1080 and visit his blog at http://blog.ethanbearman.com