It's a fraud, and has been pretty thoroughly debunked. See:
http://msgboard.snopes.com/message/u.../t/002848.html

Using electrolysis to separate water into hydrogen and oxygen takes energy. You gain energy again when they recombine to form water. At best, the net gain would be zero if the efficiency was perfect 100%. But efficiency cannot be 100% in any real device. So you actually will lose energy by doing that reaction.

Now, if you use energy from one source, such as electricity from windmills, to produce the hydrogen, and then store the hydrogen in a high-pressure container, and burn it as fuel, then you might get some economic benefit. At least you would not be burning gasoline. But, to do that, you need to completely re-engineer the vehicles to store the large quantities of hydrogen, and the engine to burn it. That is not at all like what the HHO miracle-purveyors describe...

Maybe in a few decades we will be able to make hydrogen storage systems that can store that kind of pressure safely and economically. Not anytime soon. And certainly not now.