octane by definition is a resistance to detonation or auto ignition. That is its primary relation to engine operation. any effects in mileage or power are consequential.
lower octane burns just fine as long as the engine can handle it, but can cause fouling of the engine if used on a car with higher operating temperatures. In some cases, such as the Audi 3.2L V6, which runs on the ragged edge of efficiency and has a 12.5:1 compression, you may even see carbon deposit build up despite running 91 octane. We advise people to run a fuel additive like BG 44K every couple of tank fulls to prevent this carbon build up. Also the fuel here in the states is notoriously dirty. coupled with EGR systems, they can leave quite a mess on the combustion chamber, intake manifold, and valves. the benifit of the higher octane is it does tend to burn cleaner, and produce fewer carbon deposits, which tends to keep mileage and performance at a level closer to stock.
regarding ethanol - its a great fuel, on many levels. but us hippies that are in the know realize we need a different method of producing it before its worth hugging. Its current production is via corn, which has displaced other crops, which are being outsourced to south america, which is cutting down rainforests to produce the cropland to grow these displaced/outsourced crops.
quite frankly, algae based biodiesel is the future of long range transportation. and home based hydrogen production for fuel cell vehicles via solar or wind powered electrolysis is the future of in city transportation.
just my two cents.