I've been using conditioned tap water (I use Prime) for as long as I've been keeping aquariums. This made a lot of sense when I started, since I was keeping freshwater tanks with cichlids. Cichlids will live in all kinds of crappy water conditions; so I didn't sweat it.
When I made the plunge to saltwater, I just kept using tap water. My local fish store guy said it'd be fine. That reef is four years old now and thriving. I moved it from the 55gallon tank it had been in to a brand new 100gallon this summer, but I brought most of its water with it. I am still using conditioned tap water. I should get some pictures and specs up sometime soon, I guess; for some general data points here, though, I keep hard and soft corals with a few fish and a lot of invertebrates, don't have a refugium to speak of, and run a protein skimmer 24x7.
So, yeah, it can be done. Now, that being said, I have to say that I have been thinking on and off over the years about whether I should switch to a better water source and the most convincing thing I've heard about this was earlier in this thread when someone was pointing out that, while your tap water may be fine now, you have no control over how and when it changes in the future and the city (or whoever is responsible for your tap water) does not have to announce changes before or after they make them (except in certain circumstances). This has given me quite a bit of pause.