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About 20 years ago I played around with a Spearco (sp) water injection system on an old Triumph Spitfire that I bumped the compression a little too high.
I believe the main effect of water injection is to reduce the peak cylinder pressure, but increase the average cylinder pressure, during combustion. As the water droplets are heated they absorb heat, slowing down the initial rate of increase of temperature (and so pressure), but once they are steam then they are providing more gas (in effect) to push on the piston, so the expansion process is more efficient.
Again, it's been a long time since I took physics, could be full of it!
This might be a better topic in the general engine forum.
I used to play around with 6-cyls, and whenever we were talking about water injection, it was heated water from the engine going though a special manifold, or a plate under the carb. 6-cyls have a problem that when you put headers on them, the carb gets to cold and turns the gas into drops istead of a spray.
In V-8's the problem is oposite and the carb usually gets hot, so i think a water injection on a V-8 would be cooled water like with the post about the Lightning.
Matt, that water-cooled carb. spacer does a couple of things for the inline 6. When the weather is cool and damp the heated spacer helps keep the carb. from icing. When the weather is hot the spacer helps keep the carb. from vapor-locking from the exhaust heat riser. Sort of like a temperature stabilizer. Interesting huh?