I always have a hard time explaining what Water Kefir grains really are. People ask me, "are they mushrooms", "are they bacteria" ? Ack. So here is a specific description per the bible of kefir- Yemoos.com
The grains are a symbiotic relationship of many different strains of beneficial bacteria and yeast which produce lactic acid, carbon dioxide and ethanol when consuming the sugars. The bulk of the grain that you see is a matrix of insoluble polysaccharides (complex sugars), mostly due to the L. casei and L. Brevis in it. It does not produce the stringy kefiran that milk kefir's grains produce, which is a protective mucus that is predominately soluble polysaccharides.
They are these beautiful little gelataneous structures. They bounce too! Its interesting how the grains will take on the hue of the sugar you are using. I recommend giving them a shot. Its such a cheap alternative to standard probiotic tablets. You can buy them Amazon or independent blogs. Sometimes they're giving them away for free!
For a recipe see entry: http://lushforest.blogspot.com/2012/09/recipes-string-of-pearls-x.html