Water injection is primarily used in forced induction engines to keep detonation at bay. The water not only cools the air charge through the latent heat of evaporation, but also stabilizes the combustion process to yeild a more controlled flame front. I wish I had the chemistry background to explain why combustion is stabilized, but I dont.
Water injection actually has nothing to do with adding more fuel. The idea is to be able to run less fuel without detonation. There is very little advantage on a naturally aspirated engine, but in forced induction with 300 degree charge temps off the compressor, water injection make a good replacement for an intercooler.
In forced induction engines it is not uncommon to run 50 percent as much water as fuel. In high pressure ratio(100-250 PSI) diesel engines used in pulling tractors, I have heard of running up to twice as much water as desiel. I was told that the Blagrave pulling team was burning 10 gallons of water and 5 gallons of fuel in one pull, but I dont know how accurate that is.
Chris