As a few of the guys have mentioned already, I run a proper flex-fuel setup on my car, and I love it!
E85 has a much higher octane rating than gasoline, allowing significantly more boost and/or compression and/or ignition advance without knocking, therefore it allows you to tune for much more power.
As I run flex-fuel, I never have to stress about the availability of E85 (or lack of) in particular locations. I can run any ratio of gasoline and ethanol and the car runs perfectly no matter what. The only difference is better power and worse fuel consumption as the ethanol concentration goes up. I try to run as close as possible to 85% ethanol whenever I can, but only because it's more fun.
The potential for more power is very significant, but here are some of the drawbacks that come with it:
- 30-50% worse fuel consumption
- Need to upgrade various parts of the fuel system accordingly
- If you don't run flex fuel then you have to worry about availability of E85, and how close the percentage of ethanol is to what it is advertised to be in the fuel
- If you do run flex-fuel then you don't have to worry about the above point at all, but you have to pay a lot more for tuning because you have to get a tune at 0% ethanol and another tune at close to 85% ethanol (the tuning at the in-between percentages of ethanol can be interpolated, or in more advanced ECUs like mine you can set up a non-linear increase in boost and/or ignition advance as the ethanol percentage goes up)
- I've heard that it's not great to leave E85 sitting in the tank for ages, but if you run flex fuel then you can just fill up with gasoline before garaging the car for a long time, at least if it's planned