i don't know about long term durability, but my 84 T loves the stuff. the only real issue i discovered is cold starts- it acts like a poorly tuned 75 Pinto with a non functioning choke for the first minute or so until the engine gets some heat in it. after that, it runs just like it does on 93 octane- but with a LOT more power. it feels like a 50 hp shot of nitrous.
i normally run it about 50/50 with 87 octane, and it runs better than 93 octane for less money.
as for mileage- it usually gets slightly worse mileage with more than a 50/50 mix of E85 and 87 octane. on straight gas, it gets around 17mpg. on 100% E85, it gets about 14mpg. cost per mile came out about the same 2 summers ago. one time, tho, i filled it up from empty with E85 and hit the interstate for 150 miles, and it got 24mpg.
i really need to get the stock trans rebuilt so i can actually enjoy that car, and if the E85 destroys anything, i will replace it with more modern stuff that is made for it.