yes a fine mist, aeration per say - water possesses a very high amount of latent heat, which makes it ideal for cooling the combustion process. Water will improve the knock resistance of an engine, while also cooling the intake (or exhaust in a turbo) gases, thus allowing higher boost pressures, while at the same time reducing thermal stress on the combustion process. Water will also help prevent the build up of carbon deposits, and can protect the valves and valve seats from getting burnt, pitted or distorted.
