Drink A Lot.
Drinking large volumes of water is a must for cycling. Nearly every calorie of heat you produce must be dissipated by evaporating water from your skin, which adds up to tremendous volumes for replacement: one large water bottle of 750 mL or 24 oz per hour of riding. Water is especially vital in hot or dry weather, or when at altitude.
Losing as little as 1-2% of your body's water volume can impair cycling performance by 5-15%. My own personal experience corroborates this, and you should start drinking in the first 15 minutes of a ride. Severe dehydration can cause heat stroke, heat exhaustion, and even death, especially in the summer.
By the time your feel thirsty, you are already dehydrated! Drink water preemptively. Drink more water than you think you need, and you will simply pee out whatever your body deems is the extra. A good measure is that if you are not generating a relatively clear stream of urine every two or three hours, then drink more! Otherwise, you are probably getting dehydrated and impairing both your performance and health.
There is no physiological reason to save water for later. Your body will sweat just the same whether you drink now or save those swallows for later, and you're not changing the weight being moved around either. The only reason to save water is for the comfort of rinsing your mouth out on occasion.
Choosing a Drink
Often overlooked is the chance to get in some carbohydrates and nutrition in your drinks. A mixture of 50% fruit juice and 50% water is an inexpensive and steady source of sugars and carbohydrates, to use either as a steady supplement to your blood sugar or to correct the wild swings induced by eating only at distant controls and in night riding. One hour's worth of this mixture contains 133 calories, a fair chunk of the 250 calorie per hour minimum for rides longer than two hours.
Soft drinks have lots of calories, but the carbonation makes them filling, difficult to store and drink, and the amounts required can cause an upset stomach when riding unless consumed slowly and regularly. A standard 355 mL (11.4 oz) Coke can contains 156 calories, while a can of ginger ale provides 114 calories. Personal experience indicates that many good, solid burps are necessary before getting back on the bike to avoid digestive distress.
Information on the caloric values of common cycling drinks, and more tips on choosing your drink, is also found in the nutrition section in the article Drinks of Choice.
When it is hot and you overheat as a result, digestive enzymes and cell machinery changes shape, resulting in a less efficient configuration. Hard rides steal body resources and blood flow from your digestive system, making it harder to digest more problematic foods. These conditions make many favour liquid foods over relying solely on solids to compensate for difficult digestion on hot or especially strenuous rides. Good supplements also reduce time spent waiting in line and eating, giving you the option to ride past a crowded checkpoint restaurant and fill up on 30 minutes worth of liquid energy to reach the next stop.
It's much cheaper than the cycling specific liquid diets abound, but cheaper alternatives such as Ensure High Protein are commonly available in drug stores and grocery stores and are also available in powder. Measure out a number of bottle-sized portions of the mix in advance, and keep the powder in little baggies. Some are concentrated enough to last riders 100 km per large water bottle full.
Energy drinks generally contain enough water to metabolise the carbohydrates they contain, but not enough to keep you hydrated, so extra water is needed. Generally, you should be drinking one large water bottle per hour (24 oz or 750 mL).
If you're trying to burn fat instead of carbohydrates, either to lose weight or to take advantage of the very high energy density of fatty foods, caffeine and moderation of your exercise are great ways to do it.