For the most part a combustion engine can run on anything that, well, combusts. I remember watching something about Chrysler's Jet Engine powered car which would run on anything combustive: gasoline, methanol, whiskey/vodka and even perfume. Of course the power between a jet engine and a internal combustion engine are quite different, you do have people that convert there cars to run on methanol or ethanol.
Now the different molecular structures will produced varied results such as fuel economy, engine power, point of ignition, and many other things.
I think the biggest downfall to the ethanol additive (or conversion) is that cars have not been designed for ethanol. In the last few years automakers have acknowledged this market by producing a line of vehicles for this flex fuel. Sound familiar? GM has their flex fuel line and Ford has the Flex which have the option to run on high percentages of ethanol (85%+). Now the whole ethanol movement is a conversation piece all in itself.
Now not that the 10% most states carry is going to blow your engine, but components of the car was not designed for ethanol. For specifics the fuel lines - plastics and rubbers that come in contact with ethanol, the ethanol tends to ruin these compounds.
Personal example is the gas gaskets that are leaking, like on my car now. Now this may or may not be the problem, but on my behalf it is an educated guess on my own car.
Summary: Ethanol is neutral although it has its own pros and cons.
