How is a water molecule produced when fructose and glucose undergo a condensation reaction?

Well, for the overall reaction, and assuming fructose attacks glucose (I'm basing this assumption on the account of the -CH2OH group which reduces the carbonyl carbon's electropositivity, and makes that carbon tertiary, thus making it "hard to reach" by a nucleophile), it would go like this:
The glucose's OH in C1 would first protonate (a H+ donor must be present in the rx. media). Then, the OH in a frutcose's C1 would attack nucleophillicaly the C1 of a glucose with has already been protonated, and this would release a water molecule, and leave a positive charge on the fructose's C1's oxygen, as it'd have 3 bonds. This is followed by this oxygen's disprotonating, expelling a H+ ion.
Overall, the condensation releases 1 H2O molecule, but there is a proton exchange involved.

With G and F standing for the C1 carbons of glucose and fructose (the rest of the molecules are not written, for readability), that'd look like this:
G--OH + H+ => G--OH2+
F--OH + G--OH2+ => F--OH+--G + OH2
F--OH+--G => F--O--G + H+

Exchange G and F and you'd get the scheme for glucose attacking fructose instead.

When alpha glucose and beta fructose condense sucrose is formed via a glycosidic bond between C1 of glucose and C2 of fructose. The H of the OH on C1 in glucose reacts with the OH on C2 of fructose forming H2O.