Interesting, I'd not factored in the emissions controls, and had always understood the 'manufacturer factoring in issues of fuel quality' argument to be the nub of it.
The implication, though, is that by circumventing emissions controls, you are doing environmental damage, which is true enough. However, I don't think it is that simple. All vehicles using combustion engines do environmental damage, but this way you at least have a choice about what damage you do. NOx emissions are harmful, but they are also short-lived and degrade into other (arguably also harmful, but also not very persistent) products. Ultimately, they will probably contribute nitrates, of one form or another, to the soil. They also confine their harm to largely local effects. Whereas CO2 emissions are incredibly persistent (best estimates are that CO2 lingers for c100 years), and are doing vast damage to the entire planet.
Faced with a choice between emitting more NOx, and less CO2, I think I'd go with emitting the NOx. Tony's admittedly anecdotal account suggests CO2 reduction on the order of 20%. Taken globally, that would be a stunning outcome. And to think you also get a more driveable vehicle as well...
