In chemistry class, they used to tell us that it takes more energy to knock water apart than you gain putting it back together. Also, considering how violently hydrogen burns, you would have to be very careful not to blast holes in your pistons. Water injection is probably nearly as effective and a lot safer.
Hydrogen based fuel does have a lot of potential. So does hydrogen peroxide for that matter, but it will take some special engineering to make it halfway safe. (ask the Zeplin works
)
Something that has a lot of potential and is available is CNG/diesel technology. So far, it's only used on large marine and railroad engines, but the principle is sound. They inject CNG in an amount based on power needed, same as diesel. Then, because the flashpoint is a little higher than you can get with compression ignition, they inject a tiny amount of diesel to light it off. They get about the same power as pure diesel, but it's a lot cheaper and cleaner.
