I have tuned many many cars on e85, so let me add a few things.
E85 IS hygroscopic, but it will not damage anything in your fuel system meerly by making contact with it. However, E85 without tuning for it will be bad news if you beat on the car. This is because E85 has a different stoichometric ratio than gasoline. You need more fuel to keep the air to fuel ratio happy because E85 has less energy, this is also why your fuel economy is reduced with corn.
Being hygroscopic means that the older the fuel is, more of it is water and less of it is fuel by volume. The reason that people don't give E85 an official octane rating is that it's octane rating depends on its age, as well as the seasons. Now, water is also a knock supressant and will allow the fuel to behave like a high octane fuel (not what it should be without water) but water will do nothing for the air fuel ratio which can cause the car to run lean. Also bad news.
Out here in Vegas, fresh E85 from the pump might be E85 but it might also be E70. Let it sit a week in your tank and E70 is now E60. This changes the octane which changes the amount of timing that you can run safely, and this is why I advise against E85.
With the M and the WB02 and auto tuning functions, as long as you can change the target AFR's you can run the E85, but you won't notice any benefit without extra timing, and short of relying on the knock sensors and timing retard, it's a never ending tune.
03 325i - Daily Driver
05 GTO 750 RWHP - For Sale
09 e92 - Pending purchase.
Last edited by ArthurJGuy; 10-27-2012 at 01:45 PM.