In some parts of the country, when you go to the gas pump, you get up to ten percent ethanol regardless of the octane you choose. In places like the Midwest, ethanol is an option and you'll even pay less for it than gasoline without ethanol additives. The rules for inclusion and disclosure of ethanol vary by state. In those cases where you do have a choice, what are the pros and cons of this choosing ethanol.
The chemistry says that ethanol contains less energy than an equivalent amount of gasoline. That means that you'll get lower gas mileage with fuel containing ethanol. The U.S. Department of Energy's fueleconomy.gov website says that it's a reduction of 3-4%. If you've got a fuel efficient car that would otherwise get 30 miles per gallon, that translates to 28.8 miles per gallon instead. Others say that it can be a bigger difference, especially if the ethanol is exposed to moisture.
Ethanol tends to pick up water at a much greater rate than gasoline so ethanol blended fuel that isn't properly protected from moisture does actually suffer a further reduction in its energy content.
Most modern automotive engines these days are designed to operate with up to ten percent ethanol in the gasoline they burn without extra damage to the engine. Manufacturers' warranties for those engines allow the use of ten percent ethanol or E10 fuel. However, if greater concentrations of ethanol are used, many of these warranties are voided.
There is one class of automobiles that is designed for higher level of ethanol however. Flexible Fuel Vehicles (FFV) are made to burn gasoline or fuel that is up to 85 percent ethanol called E85. Chrysler and General Motors both make FFVs that can run E85 fuel. Again though, because of ethanol's lower energy content, FFVs that use 85 percent ethanol will get 25-30 percent fewer miles per gallon than the same FFV using gasoline.