Yikes!
As far as I know, water in your gas doesn't cause detonation, super heated water would become steam, and that doesn't burn either...
The octane argument is a long standing one. Most guys buy a new motorized toy and think they will pamper it with the best gas they can buy, and they 'feel' a difference.
While it's hard to take two sleds that are both stock, run cheap gas in one and premium in the other and test them scientificly, you can see results when racing your buddies or when refueling.
A stock motor with no mods is usually made to run 87 and should, by upping the octane you can lose a few hp. But, by upping the octane and advancing the ignition timing, you can gain some hp! On a sled, it's just not practicle to be messing with the timing all the time on the trail, so in general, it's a waste.
On a car with a distributor though, you can see gains as soon as you bump the timing up. I just did this on my VW. It's got 10:1 compression and is EFI, runs on premium anyway. I didn't use a timing gun or anything, just advanced until I got a teensy bit of spark knock. Or preignition. This is the edge of controllable combustion, go too far and you'll hurt parts, too little and you're a dork, keep trying!hehe
The theory behind advancing the timing in the first place, is that the motor will then use all of the available fuel to make power. Start the spark earlier, and you've got more time to build pressure and heat against the piston surface. It works well. I suggest experimenting with something with a distributor, not your wifes daily driver, hehe. I know you were thinking it!