If the water smells bad, many odors (including chlorine) can be removed by boiling. Some city water supplies use a chemical called chloramine instead of chlorine to kill bacteria. Chloramine cannot be removed by boiling and will give a medicinal taste to beer. Chloramine can be removed by running the water through an activated-charcoal filter, or by adding a campden tablet (potassium metabisulfite). Charcoal filters are a good way to remove most odors and bad tastes due to dissolved gases and organic substances. These filters are relatively inexpensive and can be attached inline to the faucet or spigot. Campden tablets are used in winemaking and should be available at your homebrew supply shop. One tablet will treat 20 gallons, so use only a quarter or half of the tablet to help it dissolve. Another alternative is to use bottled water from the grocery store.
If the water has a metallic taste or leaves hard deposits on the plumbing, then aeration, boiling, and letting it cool overnight will precipitate the excess minerals. Pour the water off into another pot to leave the minerals behind. Water softening systems can also be used to remove bad-tasting minerals like iron, copper, and manganese as well as the scale-causing minerals, calcium and magnesium. Salt-based water softeners use ion exchange to replace these heavier metals with sodium. Softened water works fine for extract brewing but should be used with caution for all-grain brewing. Depending on the type of beer, the mashing process requires a particular balance of minerals in the water that the softening process will remove.
A good bet for your first batch of beer is the bottled water sold in most supermarkets as drinking water. Use the 2.5 gallon containers. Use one container for boiling the extract and set the other aside for addition to the fermenter later.