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Hydroencephalitis (or hydrocephalus) is a condition where fluid builds up around the brain. It puts pressure on the brain, and without treatment, can cause brain damage and even death.
With treatment, however, the patient can lead a completely normal, productive life. It depends on the severity of the hydrocephaly and the speed with which it was corrected, but the human brain can be pretty resilient. If the hydrocephaly was corrected in infancy or in the womb, the brain may very well compensate for any and all damage that was done. If it was severe, there may be varying degrees of retardation or Cerebral Palsy. There's usually no way to tell how severe it is until after the surgery is done and the fluid drains away. Once the shunt is in place and the brain has had a chance to recover, the extent of the damage can be assessed. The shunt controls the pressure in the skull, so as long as everything is functioning properly, there shouldn't be any relapses or loss of cognitive ability. They need to be vigilant for the rest of their lives, but they're essentially healed.
There are some risks associated with the shunt itself; they need to be monitored throughout a person's life. They may need maintenance or lengthening, and they can become infected, but they don't carry much more risk than most medical implants.
I can tell you from personal experience that people with congenital hydrocephaly can be completely normal. I once dated a girl with a shunt, and she was smart, successful, funny, and perfectly healthy. I never would have known she'd ever had the condition at all if she hadn't mentioned it to me! My grandfather also suffered from acquired hydrocephaly, which means he didn't suffer from it until later in life. He was misdiagnosed with Parkinson's for years, but once they figured out what was really wrong and corrected it with the shunt, he was healthier than he'd been in a decade. Had he not been well past the age of retirement, he would have had no problem returning to work.
Hope this helped!
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