Rohan- That's a very nice question. I assume you are refering to liquid water, not ice, since 4°C is about the temperature (T) at which liquid water has a minimum volume, at atmospheric pressure.
The exapnsion of water at lower T results from the water molecules arranging themselves to minimize the energy of their interactions. For most molecules, that typically involves squeezing together a bit, but water happens to have a low-energy arangement that's rather open. When things cool, they settle into lower energy arrangements. At higher T, the molecules sample even higher energy states, and a najority of them are loosely packed, so the liquid expands- the more typical behavior.
I haven't said why 4°C is special. Nothing realy special happens there in the structure of the water. 4°C just happens to be the T at which the expansion, due to settling into the special low-energy states, and the contraction, due to the general trend to spend more time in contact at low T, cancel.
0°C is another matter. At that T, the tendency toward settling into a special low-energy structure runs away in a cooperative manner, and ice crystals form. Water samples just above and below 0°C are very different. Just above and below 4°C they are almost the same.
(published on 08/29/06)