As a reference... In an auto engineering trade mag I picked up a SAE World, there's an article about a prototype Lotus Elise running E85...
If I remember correctly, it's 11-11.5:1 CR, supercharged, with 6 injectors (4 standard location, 2 pre-S/C). They were also running it with the knock control disabled. The two pre-S/C injectors aided charge cooling, and I believe they said it could have run just fine without the air-air intercooler altogether. I think they picked up 60 extra horsepower with just the addition of the two injectors and more advanced timing. Those were the only changes (injectors/timing) over the base car.
From what I've read, E85 has an octane rating of about 100, thus the higher timing that can be used (not to mention the better charge cooling effects). BUT, mixes as low as E70 can be labeled for sale as "E85" for better winter/cold starting performance, so you have to be careful if you're building/tuning an engine based solely on E85.
My thoughts on the flex fuel cars is that they probably run their standard gasoline-only engine compression ratio, but increase/decrease timing and fuel flow based on the fuel mix. Since the change is mostly software-based, and most people will run plain old E10 anyway, it seems to be the most logical choice (to me) for an OEM.