> Is there any loss in effectiveness in using standard atmospheric air
> What do you do with the resultant H2O
I can't imagine why an aircraft would ever want to carry its own oxygen supply, and capture the byproduct. Oxygen is heavy. Are you thinking of a spacecraft?
More specifically, hydrogen has an atomic weight of 1, whereas oxygen has an atomic weight of 16. For producing H20, that means you would have to carry 8x your hydrogen's weight in oxygen, if you don't use atmospheric oxygen.
> What do you do with the resultant H2O
I can't imagine why an aircraft would ever want to carry its own oxygen supply, and capture the byproduct. Oxygen is heavy. Are you thinking of a spacecraft?