The idea of liquid water on Mars is an enticing one. We know life on Earth needs liquid water, and if we find it on Mars... We know there's plenty of frozen water on Mars; we see it there in abundance. But Mars is cold, and the air is thin, making liquid water on the surface difficult to achieve, let alone sustain.
But there's been tantalizing evidence. Ever since Mars Global Surveyor got to the Red Planet in 1997, we've seen gullies sprinkled here and there. These gullies form on slopes near the tops of the hills, and are clearly the result of something moving downslope and digging furrows. But is that something water, or just sand and dust? The conclusions flip-flop back and forth; I've seen papers come out saying water-not-sand and others saying sand-not-water several times.
PDF: Martian Gullies: