This is something I noticed originally when I was living in Savannah, GA going to school. That area has very hard water.
I did have a lot of problems when I was pressing seams and ironing my clothes. The iron wouldn't heat or steam evenly. I also used to have this film or residue on the cloth afterwards. I never gave it much thought though. I simply thought it was a cheap iron.
When I moved back home, my mom started using distilled water in that same iron, and all of the problems that I had been having cleared up. The iron worked better than ever.
Because water evaporates as it boils, any impurities in the water would only be concentrated as it's boiled. Plus, the longer its boiled, the worse it will become. So, I would definitely say distilled water is best with bottled water being a distant second, input if you cannot easily get distilled water.
Yeah - admittedly that's why I like writing up these little things. They're not really 'tutorials' but just useful things that hopefully will help people.