3 things. 1st it is a NOX reducer (EPA stuff). 2nd it is an EGT reducer. 3rd it is a power enhancer.
Heres how it works. Water is injected into the combustion chamber at the top of the compression stroke pretty much when the fuel is being injected. This water, (fine vapors) takes up space in the combustion chamber which raises compression ratios since the water cant be compressed. It then cools the EGT's, which also gets rid of the NOX polutants.
Nox's are the evil things the EPA hates diesels for. The only way to get rid of them is to cool the combustion temps, but to do that any other way would result in a diesel running too low of combustion temps, which would result in unburnt fuel vapors exiting into the atmosphere. A cant win position for the diesel industry. Water injection is being researched to cure this problem.
The tractor pullers are who people associate water injection with. Alot of them use it for the increased compression ratios, and cooler EGT's to keep from melting anything.
Not sure what your friends were telling you, but you have something to tell them now.
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[This message has been edited by Chad Sheets (edited 01-23-2001). ]