Wow... has anyone actually put a flame to transmission fluid/used oil to see how it burns and what it leaves behind? I would think this is going out the exhaust and hitting the turbine wheel on the way out the pipe...
Adding oil to the fuel will increase the density and, therefore, increase combustion pressure(hydraulics) so your economy will go up. However, the oil isn't burnt completely so the residue exits... or stays behind and collects on the head and valves.
I guess it depends on how much oil you add and how much it completely burns.