Soak a napkin, hanky or towel in vodka, enough so that your fingers could eventually absorb the smell. Place this in your pocket.
Grab a spectator and bring him towards a table, while lining up the 10 shot glasses in the process.
Pull out the bottles of vodka and water. Remove the caps of each and let the spectator smell. Before doing so, however, wipe your hand on the napkin to get that smell on your hand.
When the spectator smells the vodka, he is actually smelling it on your hands, because beforehand, you filled the vodka bottle with WATER!
Proceed to pour nine of the shot glasses full of water. Pour the tenth one full of vodka, which is actually water as well.
Turn your back and instruct him to mix and match them in any way he likes, because you are going to use HIS body language to figure out which one has the vodka.
Turn back around and pretend to watch his reaction as your finger hovers over each glass. Quickly pick up one after the other and drink without thinking. They are all water. Finally, pick up the last glass and bring it to his nose. Again, he will smell your finger and think it's the glass. Beautiful.