1. We can use less water when we do the dishes.

2. We can use less water when we are doing the dishes.

3. We can use only a little water when we wash a car.

4. We can use only a little water when we are washing a car.
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Are they all grammatical? What is the difference between the ing form and the base form?

All are fine.

The present and the present progressive tenses are both used correctly. The progressive seems to give the feeling of current action to each of those sentences.