Never seen braided metal used on a water heater like that. We use pex pvc to plumb into water heaters in my neck of the woods. It is more than likely condensation, but if you have over tightened your braided pipes, then the seals may have been compromised, resulting in a small leak. You can purchase some pipe insulation (foam wraps) to put around your pipes to prevent condensation, if that is the case. They are black and have an adhesive strip built into them to seal them up if you want, but I would leave them unsealed at first so that you could easily remove them and check to see if that remedied your problem. If it is the seals, then you will need to purchase other pipes. Pex pipe is easily installed and faster. It used to be called quest pex. The tool to install it is only around $60, too.
Cub Cadet 123
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Still don't know what I'm doing in OHIO?.....If you find me, then please point me back toward INDIANA. 
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