After reading John's very informative post, I think I have a better way of wording what I was trying to say.

The FEH is more FE because it has systems in place to recapture the undesirable overhead in a standard ICE-only system. As I see it in a standard ICE only vehicle, there is overhead in forcing an ICE to work across the full RPM range, overhead in non-moving idle time, overhead in non-regenerative braking, and overhead in engine/compression braking. Some (most?) of this overhead is recaptured on the FEH via the hybrid drive train components and used later to power the vehicle or assist the ICE (including multiple start-ups that could be seen as an overhead of the hybrid system).

The FEH ICE is only more efficient compared to a conventional ICE because of the Atkinson-like cycle and the ECU's ability to take advantage of the more efficient RPM zones (once again I could be wrong on the second part of this statement). The EV portion of the FEH is more efficient only if the power used is from the overhead listed above and not if the ICE was used specifically to create the power.

Oh, anywhere I say FEH, please feel free to substitute MMH and this will be directly related to the thread topic.