As you know for gasoline the stoichiometric air/fuel ratio is 14.7 to 1.0 and for ethanol the air/fuel ratio is 9.0 to 1.0. Therefore, adding ethanol to gasoline will cause the mixture to lean out when using a fixed orifice carburetor. That is to say ethanol requires a larger orifice to flow more fuel.
For 10 gallons of E-10 we have; 1 gallon of ethanol and 9 gallons of gasoline. Therefore, the stoichiometric ratio becomes, [(9 x 14.7) + (1 x 9.0)] / 10 = 14.1 or a lean out of approximately 4%. Most engines can tolerate this which is why E-10 can be used in carbureted engines designed for gasoline only.
The octane rating of ethanol is 105 to 110 so as you increase the ethanol percentage the octane rating of the ethanol/gasoilne mixture moves toward that of straight ethanol.
Ethanol cools the intake charge due to it's higher latent heat of vaporization, 396 btu/lb versus 150 btu/lb for gasoline. Therefore, the engine combustion temperature is reduced over that for gasoline alone.
As for the separation issue I would suggest you experiment for yourself (you will anyway) with various ethanol/gasoline percentages by adding water to them. Compare the ethanol/gasoline mixtures to straight gasoline - I think you will be surprised how well the ethanol mixtures tolerate water.
As for ethanol damage to rubber components, if you are concerned, simply install a shut off in the fuel line. Shut off the fuel and run the system dry before shutting down or long term storage.
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