I have a bit of a hybrid theory about dishwasher use. For the random daily cup and spoon naturally I'll wash by hand, but I cook a "real" meal once or twice a week, and for those dishes I'll use the dishwasher when I know it'll be good and full (sometimes it takes a couple days to build up enough dishes to justify the dishwasher -- I somehow manage not to wash dishes during that time ;-). Two reasons for that -- first, I've heard and read that the dishwasher should be used at least occasionally to keep the seals moist and working. If the seals dry out the dishwasher will leak. Particularly since I rent from a relative I want to make sure the appliances stay in good working order. Also, I believe I've read that water use is actually lower when using the dishwasher for a full load rather than washing by hand. Naturally I "air dry" instead of using the machine to do that.

I have the same problem with hard water and the only thing I can say is either get used to the cloudiness, or get in there with a hand towel before everything gets really dry, and hand-dry the dishes so the minerals don't dry on the dishes.