when you water inject an engine it significantly cools the fuel/air mixture which allows it to be compressed more than normally which boosts the power out put while also making it less likely to detonate prematurely on the next cycle. The down side is that you can only water inject when the engine is at full throttle and wide open or you run the chance of drowning out your pistons by flooding them with water. The other way that it can hurt your engine is that when the water droplets take on the heat of the combustion the resulting steam cranks up the pressure in your cylinders (basically turning heat into pressure) which your standard engine won't be able to take for very long. it is a great concept and helps a lot with fuel economy, boosted power output, and cooling of the engine, but it greatly increases the amount of pressure that your engine has to deal with
