I'm not familiar with the stories you're refererring to, but the technology you're describing is called Miller cycling:
Miller cycle - Wikipedia, the free encyclopedia
While most people think that it's the compression ratio that infulences the effiiciency, however, it's actually the expansion ratio. For normal engines both ratios are basically the same. For the Miller cycle, the compression ratio is lower than the expansion ratio. This is because the effective compression ratio is lower than the geometric compression ratio (because some of the air is pushed back out).
It's the compression ratio that limits the engine (knock in the case of a gasser, peak cylinder pressures in the case of diesels). Miller cycling allows you to run a higher geomtric compression ratio without hitting the engine limits.
The downside of Miller cycling is that you lose power. Since you give up air, you give up fuel, therefore you can't get as much power out of the same engine. That's why it's not widely used. Some manufacurers have compensated by adding turbochargers and/or superchargers to help the power issue, but then that makes things more expensive.
Miller cycle engine have been mass produced by several companies. Mazda has made it:
MAZDA:Miller-cycle engine | Environmental Technology
GE puts it in some of it's diesel PowerHaul engines:
Eco-minded Powerhaul leads the way into global markets
The concept is not that different from the Atkinson-cycle engines in the Toyota Prius/