I haven't yet found a decent explanation for how water moves throughout plants. It does seem to travel more efficiently upward than out or down. Why is that? How does it travel through the plant?
Most water moves up through the xylem by capillary action. Imagine dipping a pipette into a small pool of water; the water would rush up into the pipette. Or, imagine dipping the edge of a paper towel in water. The water "runs" up the paper towel. This is capillary action.
As water evaporates out of the leaves and such in higher regions of the plant, a capillary force pulls up more water. If for instance, you were to dry the top of your saturated paper towel, more water would be pulled up from the pool below to wet that top section.
As for a molecular explanation, Wikipedia has a good explanation of Cohesion-tension theory.
2$\begingroup$ Indeed it does. There is tension between the weight of the water and the force of the capillary action, which they think is what limits the height of trees (nature.com/nature/journal/v428/n6985/abs/nature02417.html). Remember that the xylem is like a very, very skinny tube, so it isn't like there is a single massive column of water flowing up. With a narrow tube like that, the weight of the water builds pretty slowly. $\endgroup$– PreeceFeb 20, 2012 at 15:38