In a healthy and hydrated individual creatine supplementation will not stress your kidneys unless you consume much more than you can utilize need anyway.
crak600, creatine supplementation does several things. In regard to energy metabolism, creatine (as creatine phosphate stored in the muscle) donates phosphate to replenish ATP. A muscle with a high level of creatine phosphate can sustain anaerobic output a bit longer than the same muscle with a lower level of creatine phosphate. In addition, supplementing with creatine will draw with it extra water into the muscles themselves. In itself this results in a bit more leverage in the biomechanical system being utilized for a given lift. In the real world, these combined factors mean adding one or two reps to a given %max for many users. Basically, creatine is strength in a bottle for those who respond well to it, allowing them place a greater load on the muscle.
In addition creatine has been shown to have an anti-catabolic effect on muscle.
PIGEON-RAT, regarding increased thirst at the higher dose, if i had to guess, based on work by Colgan and others, I'd say that it's likely due to a negative shift in your gastrointestinal balance. Another theory, assuming you are consuming the ratio of creatine to high GI carb used by most supplement companies, would simply be the effect of sugar consumption on thirst.