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I built one of these (similar to the one on the Aussie site) back in 1981 after reading an article in a performance magazine. My 1930's designed carburated aircooled engine had been 'hopped up' by the previous owner to where it now had a little over 9:1 static compression. Yep, it pinged and rattled if I didn't use premium fuel. I retarded the timing, and power was noticably lower and it got a few miles/ gallon less. I guessed increase in throttle blade angle to go relatively the same cruising speed was the culprit. It seemed to run a little hotter oil temps at that timing, and didn't idel well either. Advance the timing and use premium, and all was good.
After adding the low-buck water injection, I was able to keep the advance in timing once again, but use regular fuel. The engine ran better, idled better, ran cooler, and seemed overall 'happier'. As mentioned however, there is always a downside. I ran it out of water several times, and the engine would ping <so I'd have to drive real carefully until I couldget the tank filled> Mine would go out of adjustment, too, but I never tracked down the source of that. Condensation inside the engine conserned me. This milky white sludge would collect inside the oil fill cap, and I assume elsewhere inside the engine "this can't be good" was my thought.
It was sort of a band-aid for an engine build for performance, I figured the additional oil changes, remembering to add water, fiddling with the needle valve just wasn't worth the effort. I wasn't sure if internal condensation would cause long term issues, but surmised if I drove the car daily, the condensation would just boil off as steam and go through the pcv system.
Here is the thing that most tinkerers forget when it comes to raising the compression of a normally aspirated engine: the higher the comprression ratio, the better cylinder filling you get. In fact, cylinder 'overfilling' is what you get. This is a well documented and good for a power increase. What it does for FE I don't know, and would guess it all depends on what engine we are talking about.
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