Originally Posted by MightyBobo

Octane is nothing more than a measurement of a fuels resistance to detonate. Higher the octane, higher the resistance.

You could, in theory, cruise around in a 370 with 87 octane...but if you even think about putting a load on the motor, your odds of running into trouble are high.

E85 is great if your car is setup for it: it burns cooler, has a higher overall octane, and its cheap. Assuming you make sure your source is ACTUALLY E85 (and not, for instance, E70 or whatever they run in the winter in many places...), then in essence, its race gas on the cheap. However, its downside is obvious: to get the same amount of energy from E85, you need to burn something like ~30% more fuel to get the same effect as pure gasoline of the same octane. None the less, E85 will still be cheaper overall, over race fuel.

So, when your running forced induction, you can keep raising your boost thanks to the higher octane, and go for a more aggressive tune with E85. Obviously, raising boost is a very quick way to gain power, hence why anyone who has a 335i, WRX, or Evo do these mods very quickly (along with the good breathing mods, of course).

On the 370, all you could do really is advance your timing and squeak out a little bit of extra horsepower, but (like Zed's already said), you wont be seeing a huge gain at all in our car - its pretty efficient as it is.