The instrumental record of surface temperature change is based on a combination of land air, marine air, and ocean surface temperature changes recorded over roughly the past century and a half. While several different datasets exist, the most widely used version has been produced by the Climatic Research Unit (CRU) of the University of East Anglia in the UK. Issues of consistency and homogeneity of the measurements through time have been taken into account in constructing this global surface temperature database, and measures have been taken to ensure that all non-climatic inhomogeneities (including Urban Heat Island effects) have been removed.
An Urban Heat Island is a metropolitan area which is significantly warmer than its surroundings. As population centers grow in size , they tend to have a corresponding increase in average temperature. Not to be confused with global warming, scientists refer to this phenomenon as the “Urban Heat Island Effect” (UHIE). There is little controversy in the existence of the UHIE. What is more controversial is whether, and if so how much, this additional warmth affects the (global) temperature record. The current state of the science is that the effect on the global temperature record is small to negligible. More information can be found here.
Water vapour act as a powerful greenhouse gas absorbing long-wave radiation. If the atmospheric water vapour concentration increases as a result of a global warming, then it is expected that it will enhance the greenhouse effect further. It is well known that the rate of evaporation is affected by the temperature and that higher temperatures increase the (saturated) vapour pressure (the Clausius-Clapeyron equation). This process is known as the water vapour feedback. One important difference between water vapour and other greenhouse gases such as CO2 is that the moisture spends only a short time in the atmosphere before being precipitated out, whereas the life time of CO2 in the atmosphere may be longer than 100 years.