In vehicle racing, nitrous oxide (often referred to as just "nitrous") allows the engine to burn more fuel and air, resulting in a more powerful combustion. The gas itself is not flammable at a low pressure/temperature, but it delivers more oxygen than atmospheric air by breaking down at elevated temperatures. Therefore, it is often mixed with another fuel that is more easy to deflagrate.
Nitrous oxide is stored as a compressed liquid; the evaporation and expansion of liquid nitrous oxide in the intake manifold causes a large drop in intake charge temperature, resulting in a denser charge, further allowing more air/fuel mixture to enter the cylinder. Nitrous oxide is sometimes injected into (or prior to) the intake manifold, whereas other systems directly inject right before the cylinder (direct port injection) to increase power.
One of the major problems of using nitrous oxide in a reciprocating engine is that it can produce enough power to damage or destroy the engine. Very large power increases are possible, and if the mechanical structure of the engine is not properly reinforced, the engine may be severely damaged or destroyed during this kind of operation. It is very important with nitrous oxide augmentation of internal combustion engines to maintain proper operating temperatures and fuel levels to prevent "preignition", or "detonation" (sometimes referred to as "knocking" or "pinging"). Most problems that are associated with nitrous do not come from mechanical failure due to the power increases. Since nitrous allows a much denser charge into the cylinder it dramatically increases cylinder pressures. The increased pressure and temperature can cause problems such as melting the piston or valves. It may also crack or warp the piston or head and cause preignition due to uneven heating.
Application on a Two Stroke Engine
Because a two stroke engine relies on a well balanced air to fuel mixture in order to keep the piston and crank cool and well lubricated, the simple addition of Nitrous Oxide will behave the same way as having extremely low jetting and would likely cause a seizure within moments, so in order to properly implement such a system, one would need to devise a way of significantly increasing fuel flow along with the injection of the Nitrous Oxide while also taking into consideration the aforementioned structural impact.