AAH is a nifty bit of non-science. Mostly dead and gone and was never very good. Though, as more and more information came around it just got worse and worse.P.Z. Myers bothered to note the theory. So I might as well steal some thunder.
I did some editing of the Wikipedia page though there is an odd sort of following. Hairlessness in humans has more to do with fire than water. We regulate our heat far better than hair ever could, fire and shelter is more than enough to remove the hair requirement. When it's gone less pests and problems, and we cope quite well, moreso with clothing.
The basic idea is that humans heavily evolved in water, as such explains bipedalism, and sweating, hairlessness and other such little bits of what not. Though, rather than getting better the theory has just gotten more and more vague.