[Christ]

As far as taking up space in the combustion chamber, this was discussed in another thread using gaseous CO2... the end effect could cause a problem, unless the influx of steam/water/whatever was specifically controlled to allow the air/fuel mixture to remain as close to the spark plug as possible. What you wouldn't want is a cloud of steam shrouding the spark plug, because you would then have a net loss of power, a bunch of wasted fuel for each spark event, and a net loss of MPG.

Oh, and non-oiled cylinder walls as well.

You can add propane to your gas engine relatively easily if you want to use less gasoline per combustion cycle, but in order to lower the actual size of your engine, you should just REALLY lower the size of the engine, instead of trying to add stuff to your mixture.