It clearly states in the manual that the HCHII can only handle up to 10% ethanol in the fuel. Don't remember the page, I can look it up though if someone needs me to.

guvmint: The reason gasohol never caught on is because although ethanol means less oil in the gas, it also is only about as 60% potent compared to regular gas. ALL OF US here in California use RF, or reforumlated gasoline, which actually is PROVEN to reduce your gas mileage by 3-8%. The gas companies themselves stated this (I read it on Chevron's website). Most stations in Cali use ethanol. As you can see, without reducing the gas price to compensate for the extra we'd have to use to make up for the power lost, we're getting ripped off. Not to mention that in the end, we're getting screwed anyway because while 10 of that fuel is only at 60% strength, you end up using MORE gas to get the same as you would have had the gas been all oil-based from the beginning. (if that makes sense to you, I know my wording is kinda bad today)

masgian & guvmint: You can't simply change the software to run on E85, or else we'd probably all have opted for that by now. The internal engine parts are not made to withstand the more corrosive nature of ethanol. Apparently when mixed into the engine, it can do damage to the cylinders. Although it might run for an unspecified amount of time, I don't think the car would prove to be reliable soon after.