I am no expert, but my guess is that is an electric water heater, so it may not need to be vented (gas ones do for sure). My guess is that either the inlet or outlet water lines leaked, rusting the top of the heater and pooling in the catch pan, which then rusted the bottom of the heater. The top looks like surface rust from the picture. Dan's opinion is worth a lot more than mine!
@buffaloglenn:
I think you're right about the electric vs. gas. The oven and stove are electric... I don't think they have gas going to the units (I didn't look behind the stacked washer/dryer, but probably electric as well). Thanks! 4951