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I too have been thinking about this off and on, but haven't done a ton of research on it yet. From what I've read though, the Atkinson engine is simply less power dense. I believe (although I'm far from an expert on this) that the main difference between the two engines is cam timing (probably added duration too). The intake valve closes late to allow reversion of the air/fuel back into the intake manifold. This reduces the amount of air/fuel in the chamber, but also allows higher compression ratios and that helps compensate for the power loss. The higher compression is where you get the boost in effeciency. So, it has less power, but is more effecient. If you can live with less power, your good. How much less power? I guess it all depends on how you design the system. The Prius uses a modified 1NZ-FE (11:1 CR) engine that normally puts out about 106 hp. Once the Prius engine is done being modified into the 1NZ-FXE (13:1 CR) it has 76 hp. So, you loose roughly 25%. I'm sure having an engine with VVT and some way to control this would make things infinitely easier to play with. However, adjustable cam timing pulleys would be a cheaper alternative.
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