Creatine is constructed from 3 amino acids. All it REALLY does for you is assist in ATP generation in your muscle tissue. Your body naturally has ~3-5g of creatine present but this is quickly depleted during exercise so supplementation makes up for it. This allows you to work out with greater intensity thus leading to greater muscle gains. It is as simple as that, no more and no less. It's definatly not a magic bullet.
New creatine forms such as creatine malates, Creatine-Eythyl-Ester, and Kre-Alkalyn have no water retention and still provide the aforementioned benefit (and yes, I've tried all three of those varieties myself). They also don't have the possible gastic upset issues from monohydrate, since the mono form tends to break down into creatinine (a toxic by-product). I personally suffer from nasty gastric issues with monohydrate so I stay away from it, and thusfar my favorite stand-alone creatine form is Kre-Alkalyn and my favorite creatine/volumizer product is Dymatize Xpand (Creatine malate, Creatine Ethyl-Ester, Arginine, Glutamine, Citrulline, etc -- this stuff is great).