iPhone Water Damage Question?

But when i plug it on to a mains charger, it charges... so i dont know weather i need to leave it plugged to laptop over night and see what happens later? what do you suggest?

You can try leaving it connected to your laptop for an extended period, but I doubt you'll see an improvement. My theory on the problem is that the battery is bad. It can't provide enough voltage to the phone for it to be able to fully start up (the apple icon turning off & on repeatedly). Plugging the phone into the wall with a power adapter makes lots of power available to the phone, so the phone tries to charge itself up. USB ports on computers provide much less power. By analogy, compare the amount of water you can move through a fire hose (the wall adapter) to the amount you can move through a drinking straw (USB Port). That's an extreme example, but it still applies. These batteries do not like to get wet!

It comes on properly though on the mains charger.

Jade Cairns, remember that you are dealing with "smart batteries" These are not just for storage, but actually have a brain, well sort off anyway. So, your phone may be saying it is charging due to the power management IC, but your battery may not hold a charge. Go ahead and replace the battery. Also remember, Rice is a great first aid, but will not prevent any corrosion issues that may arise, it will also not clean in between the connectors and cable ends, and under IC's, EMI shields etc. I would go ahead and clean the phone, it will ensure that you do not run into any delayed failure later on. Use this guide for the cleaning. It was written for a 3G but totally applies to your phone as well.