In an adventure I was running, the players overcame a nasty monster in a basement by activating a Decanter of Endless Water and then sending the character holding it into the basement in gaseous form. They said that the basement should fill with water in gaseous form and when gaseous form ended the water would return to normal drowning the monster in the basement. This was clever enough that I let them have it, but reading the rules more closely it would seem that even in gaseous form the Decanter of Endless Water would still produce regular water. Also what effect would it have on a gaseous character holding the decanter while its gushing water?
RAW: The gaseous creature could not activate the decanter, but may be able to keep it active:
Gaseous Form says:
[the gaseous creature] also can’t manipulate objects or activate items, even those carried along with its gaseous form. Continuously active items remain active, though in some cases their effects may be moot.
Gaseous Form would turn the decanter itself gaseous, but I don't see anything that would render the created water gaseous; I would read that as acting like a spell that had been "prepared using the feats Silent Spell, Still Spell, and Eschew Materials" (ie., the water is still gushing out as actual water).
In that case, the monster would see the misty outline of the character, holding (well, "wearing a harness which is holding") an object from which water was pouring quite rapidly. The monster would (assuming sufficient reach or ranged weaponry) be able to attack the character and would be able to (try to) get out of the basement.
There is enough uncertainty that ruling that the water comes out in a gaseous state is entirely reasonable. However, I'm not sure it would help.
If the basement is air-tight, the monster would see the misty form of the character pouring out a misty substance throughout the basement. The monster would likely try to attack the character or run away. Also, in an air-tight basement, the monster should have already asphyxiated due to a lack of air; if it hasn't, then drowning seems unlikely to be lethal.
If the basement is not air-tight, the gaseous water would quickly flow out of the cracks, finding a level which is quite plausibly low enough for the creature to have no difficulty in breathing when the water becomes fully substantial. Again, it would clearly see the rising mist and would react appropriately. When the gaseous form effect ended, the water should probably return to its liquid state; even if the monster can still breathe, it would likely be at some penalty for being in water up to its waist/shoulders (depending on how generous a GM you are). Depending on the creature, either of those may be significant penalties, or they may be fairly minor inconveniences.
If I were GMing
That is a very creative use of an item and ability; as such, I would find a way to reward the players for coming up with it (which, strictly, is still in accordance with RAW: Rule 0 is "make the game fun"). I would probably go with the gaseous water imposing a meaningful penalty on the monster once it became substantial (and, while still gaseous, it'd probably still offer some concealment, at least for a small character).
Note: if the decanter was tuned to "geyser", I would have to rule that the gaseous character was being subject to very strong winds, over which he would have but little control.