WRONG! No matter how much alcohol you add to gasoline, once it is mixed, any
water in the alcohol will separate almost immediately. Water does nothing to
increase the octane of any fossil fuel. When water injection was used on
automobiles it was used to slow the burn time of cheap low octane gasoline. By
adding water you could keep your timing advanced to specs without the clatter
of a pinging engine from detonation on high compression engines. One primary
reason alcohol is added to fuel is its ability to retain more oxygen so when
added to gasoline you actually end up with a more efficent burn. Its an EPA
thing. Alcohol actually has a lower octane rating but because of its added
oxygenation properties, its benficial when added to gasoline.

From: Rich Hampel
Date: 9/21/04 11:26 PM Central Daylight Time
Message-id:

Nope 10% ethanol mixed with gasoline will result in the water component
forming into an emulsified form which doesnt separate readily.

Actually the additional water content helps increase the "octane"
number, and also helps to clean the piston ring grooves, blows the
carbon out of the combustion chamber, etc.
Some engines (back in 'muscle car days') used water injection to boost
power output while helping to cool the combustion chambers.