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A RO unit is very expensive. Three or Four hundred dollars. When you're dealing with freshwater fish, you don't really need one. Saltwater fish are much more delicate. The hardness in most tap water would kill them.
I'm not sure how it chemically works. I do know that you hook it up to a water faucet. It takes about 10% of pure H2O and rejects the other 90%. It is very watseful, but if you need %100 pure water, it's the only way to go.
Also, it's actually bad for freshwater fish, as it removes all the nutrients from water. If you use one, you have to buy a suppliment to put the nutrients back into the water so you don't kill the fish.
So, unless you are planning a reef, tap water with a conditioner works just fine.
They aren't that expensive if you know where to look. If you buy it in the LFS or your local water dealer then you would easily pay that. I picked up my brand new 5 stage RO/DI kit on eBay for $100. There is a ton of them listed for that price everyday.
The only reason one should use a RO kit on FW is if you need to soften up your water a little and/or reduce the pH. However, this is a drastic step. Other options are available.
RO works by supersaturating the water in an osmosis chamber (bag of water made of special stuff with selective pores) so that pure water "wants" to escape from the bag. very good way to get absolutely everything out of your water, including RNAses and other sneaky enzymes. you only really need it if you have very delicate fish and VERY bad water. Rain water is cheaper...