I know it's more than 70% water. But what has it got to do with earth's colour ?
Quite a simple answer: Scattering of light (Rayleigh scattering would be more precise here...)
The water bodies (ocean, lakes, river) appear blue ('cause water is quite colorless) because of the way sunlight is selectively scattered as it goes through our atmosphere. Taking Raman effect into account, Water absorbs more of the red light in sunlight. By this way, water also enhances the scattering of blue light in the surroundings.
By Rayleigh scattering law: (It's more important here) The amount of scattering is inversely proportional to the fourth power of its wavelength. Due to the larger amount of $N_2$ and $O_2$ molecules (78% and 21%) in the atmosphere, blue light which is having shorter wavelength is scattered to a greater extent.
Thus, the earth wouldn't be blue if it doesn't have enough $O_2$ and $N_2$ molecules in its atmosphere. The scattering depends on the characteristics of gaseous molecules in atmosphere... This is applicable to other planets also. (like Mars appearing Red, Venus appears yellow, etc.)
That's because it is because of so much water. From NASA: http://www.nasa.gov/audience/forstudents/k-4/stories/ames-big-blue-marble-storybook-text.html
The sky (which also has an effect) is blue which has to do with molecules/optics. You can check more of that here: Why does the sky change color?
As mentioned above, the sheer percentage of water covering earth makes the earth blue. But what makes the Water blue? Most of the light is absorbed by the water and radiates the Blue in the visible light spectrum. (Same idea as air!)
See more on E-How http://www.ehow.com/info_12111369_earth-appear-blue-outer-space.html