It varied from airplane to airplane depending on the systems. A number of Luftwaffe airplanes used a methanol injection system which uses the same principal. I don't know enough on the subject of Luftwaffe airplanes to say whether or not the methanol was diluted but assume so.
What you'll find is by injecting water into the fuel/air mix it effectively retards detonation to allow more power to be produced than if you were to simply throw fuel at it. Running the engine too rich will actually reduce the power output whereas the water allows more compression (temporarily as it is beyond what the motor is designed for) while keeping the fuel/air mixture lean enough to give you maximum power over throwing more fuel into the fire. What that meant was at a maximum power setting using an auto rich mixture, the use of the WEP (depending on the airplane) would actually lean the mixture and introduce the on board water supply into it. You're burning less fuel but producing more power, higher pressure and introducing more wear. "Cool" is a relative term as it's still going to get hot and it's not an infinite supply of free power that cools the motor.
Jet airplanes have used it and while it's not in service these days the older KC-135s used it when necessary on takeoffs as did early B-52s. I don't know what other airplanes
We used ADI (Anti-Detonation Injection) in our C-118s and C-131s. Both used versions of the R-2800. In WWII, the typical "water" was 50% Methanol/50% Water, or 50% Ethanol/50% Water. For a brief time in the ETO, Isopropyl was tried, but found to be unsatisfactory. Pratt & Whitney specified both Methanol and Ethanol.
As we see in the game, the NATOPS manuals for all aircraft powered by R-2800s used by the Navy limited ADI duration under normal conditions. However, in an emergency (like losing an engine immediately after takeoff, while near or at max gross weight), you could run the ADI pumps until the tanks were empty. At that point, the derichment valves would close and the carburetors would automatically enrichen the mixture to cool the combustion chambers to prevent detonation. ADI basically displaces an equal volume of fuel, so fuel flow (consumption) is reduced accordingly. The R-2800-52W engines on our C-118s, typically used about 12 pounds of methanol/water per minute, per engine to make 2,500 hp.