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A carbed engine could be re-tuned to run well on Ethanol, although it wouldn't run well on gas after the tuning. TBI response would vary based on the system. Some would tolerate it better than others.
His Jeep would probably run on E85, but being that it's not tuned to take advantage of the high octane, or optimized to run E85 at stoich (ethanol stoich is different than gas stoich), it wouldn't make ideal power, and the gas mileage would suck.
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Call me crazy, but I actually try for mpg with this Jeep:
Typical driving: Back in Rochester for school, driving is 60 - 70% city
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