Povidone is a synthetic water soluble polymer commonly used to increase viscosity or as a dispersing and suspending agent.
Povidone heated in the presence of iodine and water yields povdone-iodine.
Povidone iodine (Betadine being one brand name for the product) is generally available as a 10% solution - meaning that there is roughly 10 grams of pure povidine-iodine in every 100 ml of water.
Coincidentally pure povidone-iodine is roughly 10% iodine by weight.
This means that a 10% solution of P-I is actually closer to a 1% solution of iodine.
<end chemistry lesson>
Otherwise, yes it is a decent disinfectant, and yes it can be used in place of iodine tincture for basic water purification. On the downside it tastes even worse than tinture of iodine.
P-I is generally less irritating that pure iodine, howver P-I can occasionally be a sensetizer - meaning that following some intial exposure it can cause an allergic type reactions upon later use. However this is reportedly exceedlingly rare. Substantially more rare than bad water, if you get my drift.
FYI: Iodine allergy (a pet peave of mine)
"Little evidence exists that elemental iodine or iodide is responsible for idiosyncratic contrast reactions or povidone-iodine dermatitis, and no evidence exists that it is involved in seafood allergy. The notion that iodine confers a specific cross-reactivity between these agents is unfounded. The term "iodine allergy" is therefore unfortunate, because it perpetuates muddled thinking and unsubstantiated beliefs. It should be abandoned and replaced by more neutral descriptive terms such as "contrast material sensitivity," "seafood intolerance," and "povidone-iodine dermatitis."
http://www.radiology.ucsf.edu/instruction/abdominal/ab_handbook/04-IodineAllergy.html