In version 1.0 the consumable item system has been enhanced to add more gameplay options and depth.

Due to their age, all old items you find in the game (MREs, soda cans, packaged foods, water bottles, canteens) will mostly likely not be in a pristine state and can make you sick, poisoned, or irradiated when consumed. Be sure to inspect all items before you consume them.
Items you find in bunkers and underground have been protected from the harsh aftermath of the war. Search for items in these areas for consumables that are safe to eat and drink.

Most above ground water sources have also been irradiated due to the war. Consuming water from above ground water sources will make you sick. Clean water sources can still be found underground, or you can use the few water pumps located around the world.

As you explore the harsh world, keep a watchful eye out for any water purification tablets. They can be added to any refillable water container to purify the water inside of it.

If you decide to settle down and and create a base you can construct a water purifier that will clean any contaminated water source.
A water collector can also be constructed that will collect clean water when it rains, but don't try and drink any of it after a radiation storm as the entire contents will be irradiated. Remember, your water purifier can be used to clean the irradiated water should this happen to you.

All refillable fluid containers (jerry cans, water bottles, and canteens) can contain a random amount of either diesel fuel or any type of water, so inspect any container before drinking it.
As a devious player, you can choose to fill a canteen with diesel fuel and leave it for some future traveller to find and hopefully consume, or you can also use rotten vegetables to poison water. Consuming too much diesel fuel will kill you.

The only way to detect that an item is irradiated is to use a Survivotron to inspect it. If you do not have one, be wary of consuming anything that appears to be clean - unless you like the warm fuzzies of being irradiated.

The safest way to stay nourished is to revert back to your primal instincts and kill animals to harvest them for food, or be more civilized and just grow crops. All fresh food is perfectly safe to eat.

Be careful out there. It's a dangerous world you live in.