Tap water is usually not drinkable in Thailand. Bottled water (น้ำเปล่า naam plao) is cheap and ubiquitous at 5-10 baht a bottle, and drinking water served in restaurants is always at least boiled (น้ำต้ม naam tom). Ice (น้ำแข็ง naam khaeng) in Thailand usually comes packaged straight from the factory and is safe; there is only reason to worry if you are served hand-cut ice.
 Iced drinks
Coconut water (น้ำมะพร้าว naam ma-phrao), iced and drunk directly from a fresh coconut is a cheap and healthy way to cool the body - available at restaurants and also from vendors that specialize in fruit juice.
Fruit juices, freezes and milkshakes of all kinds are very popular with Thais and visitors alike. Most cafés and restaurants charge 20-40 baht, but a bottle of freshly squeezed Thai sweet orange juice (น้ำส้ม naam som) - which really is orange in color! - can be sold on the street for 10 baht or less. Thais often add salt to their fruit juices-- an acquired taste that you might just learn to like. Thais also like to have basil seeds in their iced fruit juice sold on the road - which looks like small jelly balls down of the bottle.
 Tea and coffee
One of Thailand's most characteristic drinks is Thai iced tea (ชาเย็น chaa yen, lit. "cold tea"). Instantly identifiable thanks to its lurid orange color, this is the side effect of adding ground tamarind seed (or, these days, artificial color) during the curing process. The iced tea is always very strong and very sweet, and usually served with a dash of condensed milk; ask for chaa dam yen to skip the milk.
Naam chaa and chaa jiin are weak and full-strength Chinese tea, often served in restaurants for free. Western-style black tea is chaa ron (ชาร้อน). Coffee (กาแฟ kaafae) is also widely available, and is usually served with condensed milk and lots of sugar. Ask for kaafae thung to get traditional filtered "bag" coffee instead of instant.
The Starbucks phenomenon has also arrived in Thailand, but for the moment local competitors Black Canyon Coffee and S&P still have the edge in marketshare. These are the places to look for if you want that triple-moccha latte with hazelnut swirl and are willing to pay 100 baht for the privilege.
Black Canyon Coffee  is Thailand's home-brewed Starbucks, but while coffee is their mainstay they also offer a limited meal menu. Try the chaa yen (lurid orange Thai iced tea with milk).
 Energy drinks
Thailand is the original home of the Red Bull brand energy drink - a licensed and re-branded version of Thailand's original Krathing Daeng (กระทิงแดง, "Red Bull"), complete with the familiar logo of two bulls charging at each other.
The Thai version, however, is syrupy sweet, uncarbonated and comes packaged in medicinal-looking brown glass bottles, as the target customers are not trendy clubbers, but Thailand's working class of construction workers and bus drivers in need of a pick-me-up. And a pick-me-up it most certainly is; the caffeine content is higher even than Western-style Red Bull, and packs a punch equivalent to two or three shots of espresso coffee. Krathing Daeng and its many competitors (including M150, Shark, .357 and the inevitable Karabao Daeng, "Red Buffalo") are available in any convenience store for 10 baht a pop, although in some places you can now buy imported European Red Bull for five times the price.
Drinking alcohol in Thailand, especially if you like Western tipples, is actually comparatively expensive - but still very affordable by Western standards.
Note that retail sales of alcohol in supermarkets, convenience stores etc are banned between midnight and 11 AM and, more bizarrely, 2-5 PM. Restaurants and bars are not affected, and smaller, non-chain stores are often willing to ignore the rules.
The misnamed Thai whisky (lao) refers to a number of distilled rice liquors, the best known being the infamous Mae Khong ("Mekong") brand and its competitor Saeng Som. The only resemblances to whisky are the brown color and high alcohol content, and indeed many people liken the smell to nail polish remover, but the somewhat rum-like taste is not quite as bad, especially when diluted with cola or tonic water. This is also by far the cheapest way to get blotto, as a pocket flask of the stuff (available in any convenience store or supermarket) costs only around 50 baht.
Out in the countryside many villages distil their own moonshine (lao thuean), which is strictly speaking illegal, but nobody seems to mind very much. Especially when hilltribe trekking in the North you're likely to be invited to sample some, and it's polite to at least take a sip.
Beer (เบียร์ bia) is a bit of an upmarket drink in Thailand, with the price of a small bottle hovering between 50 and 100 baht in most pubs, bars and restaurants. For many years the only locally brewed beer was Singha (pronounced just Sing) but it has lost market to cheaper and stronger Chang. Two upmarket brands are available today, Heineken and Tiger, and longstanding minor brands Kloster and Leo enjoy some popularity. Thais like their lagers with relatively high alcohol content (around 6%), as it is designed to be drunk with ice, so the beer in Thailand may pack more of a punch than you are used to.
Imported liquors, wines and beers are widely available but prohibitively priced for the average Thai. A shot of any brand-name liquor is at least 100 baht, a pint of Guinness will set you back at least 200 baht and, thanks to an inexplicable 340% tax, even the cheapest bottle of wine will set you back over 500 baht. Note that, in cheaper bars (especially the go-go kind), the content of that familiar bottle of Jack Daniels may be something entirely different.