[trishasales714]

I've read that NaBH4 is compatible with water and alcohols while LiAlH4 isn't. What does this mean in an actual reaction?

[phth]

Yes, that is correct.  People have reduced ketones within binding pockets of enzymes using NaBH₄, which turns into the active reducing agent(s) HB(OH)₂/HB(OH)₃
LiAlH₄+H₂O-->Al(OH)₃(s) / Al₂O₆(s) and oligomers, polymers, etc.

[trishasales714]

I'm not sure what it means by NaBH4 is compatible with water or alcohol but LiAlH4 isn't. Does this just mean LiAl4 doesn't act as a reducing reagent in the presence of water or alcohol?

Yes, that is correct.  People have reduced ketones within binding pockets of enzymes using NaBH₄, which turns into the active reducing agent(s) HB(OH)₂/HB(OH)₃
LiAlH₄+H₂O-->Al(OH)₃(s) / Al₂O₆(s) and oligomers, polymers, etc.

[wildfyr]

When added to water or alcohols, sodium borohyride is stable enough on a normal timescale (minutes to hours) that it can still reduce things in the solution. Its reactivity is somewhat lowered and/or changed in protic solvents (Like the in the Luche reduction) though. LAH will instantly make a fountain with water as it produces heat and H2 gas bubbles, and nothing you care about will be reduced, and your reaction will be splattered all over the hood. Things are a little less vigorous with alcohols, but I doubt much useful chemistry will occur.