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I'm pretty sure they tested something like this on mythbusters (during some fuel economy myth special thing), and it didn't work at all. In theory it would work. Electrically charge the water, gather the hydrogen gas, and burn it, but it doesn't make enough for any car to use.
thats why they are developing hydrogen powered engines. but they are really expensive to make and cannot currently enter the market. there is no way water could run in an internal combustion engine.