In a large pot or enamel dutch oven, place tomato sauce, crushed tomatoes, water, garlic, basil, oregano, and sugar. Cut pepperoni in halves or fourths and add that along with meatballs to the pot.
Bring just to a boil over medium high heat and then reduce temperature to low, stirring every now and then. Allow to simmer for 20-30 minutes, or until meatballs are heated through and soup has developed full flavor.
To serve: Cut 1 inch slices of Italian bread and place on baking sheet. Place in 350 oven until toasted. Ladle soup into bowls and top each with a slice of bread and a liberal sprinkling of cheese. Place all bowls back on baking sheet and put in oven on low broil. Watch very carefully and remove once cheese is lightly browned and bubbly on top. Serve immediately but warn folks that the bowls are hot :).
Optional ingredient ideas: Add in your favorite pizza toppings! For example, sauteed onion, bell pepper, etc