Ethanol does indeed kill engines, but most of the damage you'll see develop is to the fuel line and all the rubber parts inside the carburetor. It literally attacks and eats them up over time. It can also leave deposits inside the carburetor which resemble corn meal. Yes, really.
Personally, I think fuel additives are a waste of money, but to each his own. Lots of people swear by Star-Tron. There is no miracle chemical that prevents ethanol from damaging your carburetor, but you CAN get a product called Ethanol Shield. This solution breaks down any water which gets into your fuel and allows it to pass through the carburetor and into the engine, where it is vaporized harmlessely.