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No haven't head about this, but E85 ruins your engine and you get horrible gas mileage with it. As for the octane, I would at least run 89 (if you're rated at 87). I use to run 89 on my '02 5.3L until I got it tuned for 93. With a grade higher than recommended you should be able to prevent any detonation/pre-ignition. This is what EAGLE is experiencing. It's not that much more expensive and will be safer for your engine. And don't use those octane boosters as they ruin your O2 sensors and your cats.
Only difference is about $2.50 less in your wallet. However you'll hear lots of arguements saying that it burns cleaner and less pinging and produces more power.