I thought with AEM's CAI, you only need to worry about hydrolocking from having your intake submerged in water. I've had mine in my car for about 2 months. No problems yet. As for the water by-pass valve, I heard from an AEM representative, you don't need to worry about having one, unless you're on the east coast, or where it rains a lot. Over here, on the west coast, you shouldn't really need it. Although El Nino is coming around again... :?
But, if it is possible to have AEM CAI hydrolock my motor up (other than submerged), I'll definately not drive in the rain. As far as I know though, you can only get hydrolocked from having your intake submerged in water.