THe short answer is yes RO/DI water is necessary.
That doesn't mean you need an RO/DI unit. You can purchase the water at most LFS. Some grocery stores carry it, although you've got to read the labels closely. Distilled water is not the same as dionized water. The watermill things are RO water, which if they're serviced routinely will work fine, but some people have had problems with algae after using this water becasue the machine wasn't serviced regularly/correctly.
You're likely at the very least to have major algae probems if you use tap water. declorinator takes out chlorine, but there are lots of other things that municipalities add to drinking water that is good for us, but not for a reef tank, and dechlorinator won't catch all of them.
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