I'm not defending this since it smells of "get rich quick" (for someone, though I've not read the papers). But water injection is done on various engines and has been for years. Water expands at a rate of 1,700:1 (as I remember) when it converts to steam, so adding a bit that will "flash evaporate" during combustion can add a bit of power, it acts like having higher octane fuel (to reduce detonation), etc.
More here:
http://en.wikipedia.org/wiki/Water_injection_(engines)