It depends how long the water damage has been going on and how thin the tubing is. thin wall, high quality tubing is far more suseptable to rust-caused failure than heavy wall Hi-ten frames. If the rust is still superficial or the frame is new, you can protect it very effectively by treating the tubes' interior with Weigel's "Frame Saver" that you can get at most bike shops or Amsoil HDMP which is available at many auto supply stores. They are both a rust-inhibitor treated wax dissolved in a volatile carrier and packaged in an aerosol can. They appear to be the identical product but the Amsoil version comes in a larger can for less money.

To do it properly, the frame should be stripped of all of it's components and all of the frame the tubes sprayed inside with a copious amount of the protectant and rolled around to distribute the liquid over the entire surface. Allow it to dry (outside on newspaper) overnight and repeat. Be sure to spray into the vent holes of the chain stays, seat stays and fork blades if it's a steel fork. Done properly, this treatment should protect the frame from rust damage for decades.