[pacemkr86]

The anti detonant effect of a cooler combustion chamber that water may provide is offset by the greatly reduced energy water would provide compared to methanol. The expanding water molecules do provide energy as they go from liquid to gas.
As it so happens methanol has a pretty good latent heat of evaporization and does so at a much lower temperature so it cools the intake charge while raising the octane of the fuel in the combustion chamber. It also produces more power than gasoline in direct contrast to the reduced power that water provides.

So, in short, methanol is what you want to run unless you have an air cooled VW engine under boost or something where overheating can quickly become out of control.