Shampoo makes it worse, by far. Depending on the shampoo, you should really only use it like once or twice a week, and that's if you like shampoo. It's pretty much optional, hence the new "no poo" movement.

Any old water will remove the healthy sebum oils that you want protecting your hair. Depending on the type of hair, and personal factors, you should only be washing your hair a couple times a week. Basically once it starts to feel dirty or unclean, wash it, otherwise leave it alone.

Water is really good at cleaning. People don't realize that washing your hands with water alone will kill a lot of bacteria, and remove the vast majority of dirt and grime. Obviously please don't give up soap... especially for your hands, just trying to illustrate how effective water is at removing things, even things it's normally not known to mix very well with (oils).