I dunno, I had a discussion about this with one of my friends.
No tar gets into your lungs, first off. I have proved this, by sticking a cotton ball in my hose port (clean port), and going through a hole session. It came out clean.
What does come from the smoke is more of an oily residue, I am guessing from the glycerine and flavoring.
Also, alot of brands in America use Water in their mixes. Water, under high heat, vaporizes. This may have something to do with the clouds. Water is also usually the base of the flavorings, so the water may be coming from that as well.
Hookah smoke is denser than cigarette/cigar smoke, and most of the time falls, instead of rises, in a perfect setting (no draft). This leads one to believe that the smoke is denser than the air, and is also cool, therefore not rising like warm water vapor (like boiling water).
I had my lungs x-rayed recently, and have absolutely nothing wrong with them. I do run everyday and keep in great shape, so that may have something to do with it. My friend who smokes cigs wakes up in the morning and is short of breath. That means something.