It's called "Hydrolock" if i'm not mistaken, and is only an issue if you planning on driving to hawai'i. <img src="http://www.zilvia.net/f/iB_html/non-cgi/emoticons/smile.gif" border="0" valign="absmiddle" alt='
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On a more serious note, I have a similar air filter (that comes right down to the bottom of the front bumper directly in front of the driver's side wheel well, and in heavy rain, yes, the filter gets wet, but no, you will not experience hydrolock.
Deep puddles shouldn't even be a problem, unless you accidentally drive off the freeway, into a water-filled ditch in heavy rain.
The only reason my filter even got wet was because I dremeled out a few sections in a plastic insert on my front lower bumper... for the purpose of giving the CAI fresh airflow.