I realize that this is a dead thread, but I wanted to make a couple of points.
1) Themodynamics tell you that the combustion cycle is NEVER 100% efficient. In fact, there is about 2-3x more chemical energy consumed than the mechanical energy output by the engine.
2) Electromagnetics tells you that it is a practical impossibility for 100% efficiency in converting that energy to electricity.
3) It has already been mentioned that electrolosis is not even close to 100% efficient in breaking the energy bonds of the hydrogen and oxygen in the water. It's true that hydrogen and oxygen store the energy "chemically" until the hydrogen is burnt and returned to a water molecule. However, the conversion to mechanical energy is subject to the same thermodynamic limits (~30%) due to the combustion cycle.
4) Hydrogen is not necessarily the best way to store energy. While it is advantageous from when measured as stored energy per unit mass (i.e J/kg), it is not advantageous when you consider the stored energy per unit volume, even if you use liquid hydrogen. In addition liquid hydrogen requires a very heavy storage tank due to it's volitility and the extreme vapor pressure at ambient temperatures (i.e. easily over 1000 psi at temperatures up to 50 deg C).
In conclusion, if you burn 1 Joule of fuel to create 0.3 J of mechanical energy, then convert that to 0.25 J of electricity that is then used to store 0.1 J of chemical engergy stored in they hydrogen, you've just lost 0.9 J of energy to get back to where you started.
Hydrogen is also less safe than other fuels such as gasoline and kerosene. Both of these fuels are diffcuilt to ignite when compared to hydrogen. Gasoline will only burn when the air/fuel mixture is within a very narrow range, something like 5%-10%. However hydrogen will combust over a very wide range (4%-70%), making leaks very dangerous. Hydrogen flames are not normally visible. Further complicating hydrogen saftey is the fact that metal exposed to hydrogen becomes brittle. Because hydrogen is the smallest atom, it will diffuse through any other material used to contain it. Just as a helium ballon deflates over time as the helium leaks between the rubber molecules of the balloon, hydrogen will diffuse through any containment material, requiring new safety precautions in tankers and pipelines that carry it. Of course, since hydrogen is a gas at standard temperature and pressure conditions, tank ruptures cannot be contained, and any ignition of a leaking containment will often result in explosive combustion of the hydrogen, although this danger is somewhat reduced since leaks will be more likely disburse since hydrogen is lighter than air.
Given these facts, not only is it wasteful and counterproductive to install a hydrogen device in your car, it's potentially dangerous if the device is actually capable of producing significant hydrogen.