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Water injection has a number of benefits. Liquid water into vapor water has a large latent heat (amount of energy required to vaporize it). So if you've got a hot burning engine, injecting water will help cool it off some. These modern 4 cylinder rice burners that kids "tune" to high rpms with turbos and nitrous run REALLY HOT. They can start to melt pistons and valves and things. Inject a little liquid water and viola cooler engine. I've seen a tuner company advertising kits to add on to the car engines. Another feature of injecting water is the large volume change of vaporization. This is the feature that steam engines work off of. I'm not sure if it is more or less than the volume change of combustion for gasoline (but I'd guess it's less) but it is still substantial enough that it does help "push the pistons down". One issue is how to efficiently atomize (nebulize) the liquid water into little droplets that will get sucked into the cylinder. That is where the art lies. If you atomize it too small, then it evaporates and you only get the cooling benefits of the water. If you don't atomize it small enough then you don't get as efficient coolling of the cylinder. If you are running high rpm, compression, turbo'd, etc... water might help you from burning out your engine.
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