A molecular-level description of the behavior of water in hydrophobic spaces is presented in terms of the coupled effects of solute size and atomic solute-solvent interactions. For model solutes with surface areas near those of protein contacts, we identify three different regions of solute-water interaction to be associated with three distinctly different structural characteristics of water in the intersolute region: dry, oscillating, and wet. A first orderlike phase transition is confirmed from the wet to dry state bridged by a narrow region with liquid-vapor oscillations in the intersolute region as the strength of the solute-water attractive dispersion interaction decreases. We demonstrate that the recent idea that cavitation in the intersolute region of nanoscopic solutes is preceded by the formation of a vapor layer around an individual solute is not the general case. The appearance of density waves pulled up around and outside of a nanoscopic plate occurs at lower interaction strengths than are required to obtain a wet state between such plates. We further show that chemically reasonable estimates of the interaction strength lead to a microscopically wet state and a hydrophobic interaction characterized by traps and barriers to association and not by vacuum induced collapse.