Many herb enthusiasts have taken up the hobby of distilling at home now. Distilling small batches of herbs produces an aromatic water that has a slightly acidic pH. This watery distillate goes by many names by different people. Originally called aqua vitae its more common name now is hydrosol in the US or hydrolat in Europe. If you have taken any chemistry classes you may recognize the word hydrosol as referring to a colloidal suspension in water. So this word can refer to a number of substances including a small amount of essential oil added to water such that it forms a suspension.
But the important thing is to understand exactly what these watery distillates are. Contrary to some claims they do not contain all the water soluble components of the plant. A recently published study from researchers in Spain found that after distilling lavender, the remaining plant material was high in antioxidant and flavonoid compounds. Specific molecules identified were chlorogenic acid and glucosides of hydroxycinnamic acids. Both of these compounds are antioxidants and thus able to scavenge free radicals.
On the other hand, rosmarinic acid was found to be in higher concentration in the water distilled removed from the plant material rather than in the remaining plant material. Rosmarinic acid is much more volatile than chlorogenic acid so it is separated from the plant upon distillation.
So although distillation of herbs is the best way to obtain oils and waters with aromatic properties it is not a way to obtain phenolic flavonoids from plants. Being water soluble, these components are best obtained by making a water infusion, also called a tea (or tisane).
You can also see a version of this article written by me in the recent Herb Companion Magazine.
Torras-Claveria, L., Jauregui, O., Bastida, J., et al. Antioxidant activity and phenolic composition of Lavandin (Lavandula x intermedia Emeric ex Loiseleur) waste. J. Agric Food Chem. 2007, 55:8436-8443.