For sure ethanol has properties that allow an engine to make more power without detonating, when tuned for it. Higher detonation resistance, and an extra cooling property that helps prevent heat buildup. On a Buick turbo V6, we can run some absolutely insane boost on E85, but it requires as much as 50% more fueling than with regular gas. That's a pretty dramatic increase. We also have the benefit of an ECU that can run different injection and ignition tables depending on what fuel is in the tank. None of that is easily achievable on a Pontiac V8.
Right now, you'll find blends with up to 15% ethanol at the pump, though 10% is most common. The biggest issue with that is the swelling it'll cause on some seals and floats if they're not ethanol-tolerant. If the carb is tuned right, it shouldn't affect idle quality enough to be noticeable.
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