It depends on whether you want alcohol in your extract. If not, the water extraction is what you're looking for. Just make sure to read the ingredient list. ALWAYS read the ingredient list. You never know what manufacturers will slip into things. I found a bottle of brand-name 'pure' vanilla extract that had corn syrup in it!
You can also make your own extract very easily with alcohol or vegetable glycerine. Just get some beans, find a dark-colored glass bottle (brown or dark green work best), put the beans in and cover them with the glycerine or alcohol. Cap or cork the bottle and place in a cool, dry, dark cupboard away from heat. Shake the bottle lightly at least three times a week (daily is better) for four to six weeks.
I've used high-quality brandy as a base for my extract, since most vodkas are made from corn or (more rarely now) white potatoes. Glycerine works well too, though I've found it takes a bit longer for the extraction process.