I think a bottle of water has to be standing on the table because it cannot bend at the waist and/or knees in order to sit down. Then again, because the bottle has no power of locomotion of its own, and it is placed in its position by another life form....it is set down on the table.....
So - if you were the life form that placed the water bottle in said location....said bottle could be said to be setting on the table.
IF, however, you come into the room, and the bottle is already there, and you are not aware of the circumstances of its placement, the bottle could then clearly be described as standing on the table.