MIT researchers at the startup company Ethanol Boosting Systems, LLC, claim to have come up with a gasoline/ethanol hybrid engine that approaches the efficiency of today's gasoline/electric hybrids.
From an article at Power Online ("A VertMarkets Marketplace for Industry Professionals"), the design is based on boosting engine output through a combination of a turbo and ethanol injection. By using ethanol rather than gasoline, the effective octane rating increases to more than 130 which greatly reduces the chances of engine knock. This allows for a much higher compression ratio; for compared to a conventional engine, in EBS' design more than twice the amount of air and fuel can be combusted, producing a proportional increase in power over a conventional design with the same engine volume.
The additional efficiency appears to be gained purely from smaller engine sizes, with less weight. However it is achieved, EBS estimates efficiency gains over a regular turbo-charged engine to be in the range of 25-30%.
While a classic gasoline/electric hybrid also uses the electric motor to boost performance when needed, there doesn't seem to be any reason why these two technologies couldn't be combined to form a gasoline/ethanol/electric hybrid. Make it a plug-in on top of that, and we'll have a gasoline/ethanol/coal & nuclear (providing the electricity) hybrid car... I envision a car that operates like an electric car at speeds upto 35 mph, uses the ethanol injection to accelerate to highway speeds, then continues to cruise on gasoline. Then, when braking, it recouperates some of the lost energy through regenerative braking.
Of course my vision is not likely to come to fruition: this all comes at a cost - about $3000-4000 above that of a conventional design (gas/electric hybrid premium of ~$3000, plus gas/ethanol premium of $500-1000). Gas would have to come back to well over $3/gallon and stay there to make that worthwhile in the US. In Europe however, it seems like it ought to be an attractive option.