One key factor here is to remember that alcohol absorbs water, creating a combined mixture of alcohol and water. The key is to maintain the proper ratio of alcohol to water in order to keep the mixture combined. Alcohol by itself is a fairly clean burning, stable, combustible fuel that is also more resistant to pre-ignition and detonation from high cylinder pressures than gasoline vapor, thus allowing for more spark advance, etc., and some increase in power and efficiency. Alcohol also has the inherent ability to absorb heat, which can be good or bad since the whole idea is to rid the intake charge of excess heat altogether. By adding water to the alcohol, the water portion effectively helps keep the temp. of the absorbed heat down to a minimum, thus lowering the charge temp. more effectively. OTOH, straight Methanol is sometimes injected directly into the outlet stream of a turbo to absorb the pressurized charge heat that would otherwise be absorbed by an intercooler. So...why don't we just run our engines on straight Methanol?? We could produce more power this way, but alcohol isn't readily available (not yet anyway), plus you have to induce approx. twice as much alcohol by volume to achieve the same energy output as that of gasoline. :? Water can be seperated into it's two parts H2 and 0 by using electrolysis or a device known as an electroliser.