The dominant paradigm since the Apollo Missions was that the Moon was as dry as a bone.

However, a paper was put out recently (before the discovery of water a month ago) proposing a model for water and other volatiles venting out of the interior of the Moon. One of the predictions of this model is that there should be significant subsurface water primarily near the poles. The results from Chandrayaan-1 and LCROSS today confirms that this is true--there is significant subsurface water near the poles. The claims that the water is solely on the surface and due to cometary deposition or solar wind interactions are now blown "out of the water".

This model predicts a lot more water under the surface for potential use in human exploration. w00t!

Check out the paper here: http://xxx.lanl.gov/abs/0909.3832

The water found in these missions is not *necessarily* in small quantities. The research shows that it is present at the near surface, but no one has any clue as to the depth to which it extends. The assumption is being made that the water accumulated there from comet deposition, but there are other mechanisms for water delivery to the surface. A paper posted to the pre-prints server recently shows that there is evidence for water vapor in the interior of the moon that is slowing leaking out along with other volatiles. As the gases reach the upper layers of the regolith, the water freezes out and gets stuck there. Over the course of a few billion years, even a small gas leakage rate could produce large slabs of ice below the surface, exactly the kind of thing that these results confirm. Anyway, it's an interesting idea...

Here is the paper:
http://xxx.lanl.gov/abs/0909.3832