Re: Do gills on embryos show a relation to water dwelling creatures?

I have read conflicting views, some say these are actually the early 
versions of the ear canal, parathyroid and thymus. On the other hand some 
say these are gills. I can't seem to locate this information in any text 
book, I need some concrete scientific evidence.

Yes and no... The structures you are referring to constitute the early embryonic pharynx of all vertebrates. This structure is composed of six cartilaginous "branchial" arches interdigitated by "pharyngeal" pouches from the esophagus on the inside and branchial clefts on the outside. Later in fish development, the membranes separating the pouches and clefts rupture to form the gill slits and the branchial arches form the gills. In mammals, most of the clefts are lost, with the last branchial cleft and pharyngeal pouch forming the external and internal ear, respectively. The other mammalian pharyngeal pouches give rise to the thyroid, parathyroid, and thymus, as you mentioned. Furthermore, the cartilages of the mammalian branchial arches form the larynx, and the blood vessels of the branchial arches become the aorta and coronary arteries. So, no they are not gills - even when the same structures are seen in modern fish. However, they do give rise to gills in fish, and evolutionarily their conservation in land vertebrates demonstrates their importance to the basic vertebrate body plan. Examinations of fossil vertebrates and jawless fishes, like lampreys and hagfish, demonstrate the use of "primitive" gills that are not developed much beyond the branchial arches. While the "Biogenetic Law" of "ontogeny recapitulates phylogeny", which would suggest that human embryos go through a "fish" phase, was disproven over a century ago, the shared early pharynx of all vertebrate embryos does demonstrate a common ancestry.

For a more detailed discussion of the branchial arches, with lots of pictures, I would suggest an embryology or developmental biology textbook. If you can find a copy of " Foundations of Embryology" by Bradley Patten and Bruce Carlson, this would be your best source.