ill agree that due to the increased fuel there is a greater density taken into the cyclinder, and there for when you compress the charge, you will have greater pressure. It seems we are just using the term compression and pressure to mean the same thing.

Now water injection is a whole different story!
it will also increase the pressure due to the same statement as above

but the real power adder is 2 things

1) The latent heat of water will greatly reduce the temperature of the intake charge as it transfers from water to steam (same principle as sweat evaporating to cool down the body). This works a lot like an intercooler mentioned earlier, and is especialy usefull when combined with a turbo. This reduction of intake charge can allow you to boost higher.

2) The water added to the combustion process is like running race gas. People often think that race gas burns faster, when it actually burns slower. Water does the same thing - it gives you a slower, cleaner more controlled burn. This allows you to run more advance on your timing. Or when running a turbo, helps to fight detonation that will occur as you increse the boost.
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Koren
2 Strokes and I'm Off