Katherine Tyrell has an in-depth article about this often divisive question on her blog, Making a Mark today - it's well worth reading!
For me, watercolour is just that - watercolour paint (as labelled on the tube or pan), activated with water and painted on paper. Anything else should be labelled as watermedia. If, once dried, paint cannot be re-activated with water it isn't watercolour. I think it would be a terrible shame if the traditional media of watercolour, used by so many of our great artists in the past, was lost in a sea of watered down acrylics!