Prepare the Brussels sprouts by peeling off two or three of the dark outer leaves from each Brussels sprout; trim stem ends.
In a Dutch oven or 12-inch skillet, heat the sugar over medium-high heat until sugar begins to melt, shaking pan occasionally to heat sugar evenly. Once sugar starts to melt, reduce heat and cook until sugar begins to turn brown. Add butter; stir until melted. Add red wine vinegar. Cook and stir for 1 minute.
Carefully add the water and salt. Bring to boiling; add the Brussels sprouts. Return to boiling; reduce heat. Cover and simmer for 6 minutes. Uncover and cook about 15 minutes more or until most of the liquid has been absorbed and the sprouts are coated with a golden glaze, gently stirring occasionally