Water injection like you're suggesting has been used in performance applications for quite some time to prevent detonation.I suppose that if you injected enough water and some of the waste heat converted it to steam this would increase the pressure in the cylinder since water expands 1700 times when it converts to steam.
But this would have to be achieved without quenching the combustion.
Tricky
If you're looking at injecting water to harness the energy used in producing steam you might want to look at this, a 6 stroke engine.
http://en.wikipedia.org/wiki/Crower_six_stroke
The theory behind it seems pretty solid, it would be nice to see more money backing his research as I think it has some promise. Despite having quite a few hurdles to overcome I think it might be viable in some applications.
On a side note I would like to say it's so refreshing seeing some educated discussion on the subject of this "hydrogen generator" or "water fuel" or whatever people want to call it. I've beaten this subject to death on other forums and many people just do not understand the laws of physics are immutable and what they're trying to accomplish is impossible.