In a large, heavy saucepan bring the water to a boil. Add a generous teaspoon of salt and the grits and stir with a wooden spoon to combine. When grits thicken, add the milk, cream and butter and return to a boil. Reduce heat to a simmer, partially cover the sauce pan and cook for 45 minutes to one hour, until grits are very tender, smooth, and creamy-thick. Add the cheddar, season with black pepper, and stir until cheese is melted. Serve hot.