yes, the water/radiator Fluid is what its pumping thru there, the fluid gets hot when it enters the motor and gets cooled in the radiator. The Pump on some older cars is where the fan is connected.
There is also usually a little hole on the bottom side of the rotor/shaft, you usually see a rusty run going down the front there, like sometimes in a old bath tub that leaks. hehe
Bmr4life, I feel stupid all the time, does this help.
If the waterpump pulley wobbles slightly when you yank it around, if it leaks, or if your engine overheats with the rest of the cooling system functional, your waterpump needs to be replaced... otherwise leave it alone.
There is a small hole on the water pump neck that usualy leaks when the bushings are shot and is time for a new pump. So if there is even a few drops coming from it, I would get ready to replace it. Also like RAYIII said check for shaft play on the pump by grabing the pulling bolted to it and shaking it, if its even a little loose it maybe about to go.