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Allch Chcar brings up a really good point about the actual chemical composition of ethanol enriched fuels. Most e-10 fuels are an 89 octane, but I have seen some pumps spread out over the country that were advertised as e-10 at 87 octane.
I've been trying to dig up the emission/mpg test that the epa ran on the new 2009 vehicles. If I remember correctly, most of the newer sedans brought in about 85% the mileage on e-85 as they did on 87oct.
Higher compression, smaller volume engines are begining to narrow the gap in mpg on ethanol fuels. I think that we can expect that most new vehicles will range anywhere from 11.5-13:1 compression ratios in the coming years.
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