It is becoming common to blend Ethanol with Gasoline in many states. Most stop at 10%, but there have been cases where higher concentrations of Ethanol has been found in pump fuels.
Ethanol by itself is not bad. E85 (75-90% Ethanol, the rest Gasoline), if you have a readily available supply, can be great low cost high octane fuel.
The downside to ethanol, especially in low ratios such as E10, is that you do not get any of the benefit of ethanol’s high octane rating. You do get its cleaning properties though, and that is where the trouble begins. Ethanol will clean off the varnish and other deposits in your fuel tank and fuel system. Usually (hopefully) this is caught in the fuel filter. It is not uncommon for fuel filters to be come clogged very quickly as the switch to fuels containing ethanol is made. The good news is that this is not a perpetual case. The “dirty” stuff will be cleared out fairly quickly and it may only take killing a handful of filters before the change interval can return to normal.
The other potential problem is compatibility with the fuel system. Modern fuel systems should all take 10% ethanol fairly easily. It will speed up the deterioration of older fuel lines, and it is always a good idea to replace all of the soft lines on the fuel system with some frequency.
E85 as a fuel is a lot harder on the fuel system than E10. You will need Viton or similarly chemical resistant fuel lines installed. You will also need a larger capacity fuel pump and larger injectors, as it will take approximately 30% more fuel to make the same power.