Like all spark ignition combustion under high pressures, some oxides of nitrogen will still be produced when the hydrogen burns, although they may well be much lower than with hydrocarbon fuels. Of course, this does not apply of the vehicle has a fuel cell instead of an internal combustion engine.
We need to be clear here. There are two distinct fuel 'systems' on the table. The first is the Browns Gas/HHO/electrolysis cell system that generates hydrogen and oxygen from water using electricity, which I'll talk about in a moment. The second is hydrogen as a fuel pumped into a tank and used to power the vehicle directly.
This latter one is simply using hydrogen as an alternative fuel to petrol, diesel, LPG or veg oil and there are already a number of hydrogen powered production cars on sale in the US. Currently they use near standard spark ignition internal combustion (essentially petrol) engines, but some will be using fuel cells in the not too distant future. Now, one of the grand schemes for hydrogen power is for each house to have a hydrogen generator to produce hydrogen using electricity from solar panels or wind power where possible, or using power from the national grid if other greener forms of electricity aren't available. That hydrogen would then be stored and used in things like domestic heating boilers and cars. Unfortunately, this is a little bit of an environmental blind alley. Electrolysis is not 100% efficient. With a bad setup a lot of electricity is wasted heating the water, and even with a good setup a significant amount of electricity doesn't get converted into hydrogen. Then you come to burn the hydrogen. In a typical engine only around 20% (at most) of the energy in the fuel is converted into usable power to drive the vehicle. The rest is lost as heat. From this it is clear that the bulk of the electricity used to create the hydrogen doesn't go towards driving the vehicle along meaning that perhaps only 10% of the power from the electricity reaches the wheels. Compare that to an electric car where efficiencies are much higher and it becomes clear that the future lies with electric cars once a suitable means of storing the electricity can be found and we don't have to rely on heavy and bulky batteries to store a relatively small amount of power.
Going back to the first system (the electrolysis cell) there are two claims frequently made about what is going on. The wildest claim (and one that waterboost don't make) is that the cell produced hydrogen and oxygen using spare electricity, which is then burned in the engine to produce power. The claim is that the energy is released from burning the hydrogen is totally free. This is absolute nonsense. The alternator consumes power from the engine to generate electricity for a start. Increase the load on the alternator by adding a cell and you increase the power drawn from the engine, so there is no such thing as 'spare' electricity. Second, one of the fundamental laws of physics is the conservation of energy. Assuming 100% efficiency, this would mean the power taken from the engine to drive the alternator to generate the hydrogen would be the same as the amount of energy released by burning the hydrogen. Or to put it another way they cancel each other out meaning the nett power gain at the flywheel would be zero. In truth things aren't even this good. As I said above, burning fuel in an engine isn't very energy efficient, so in actual fact you would only get about 10% of the power back that went into creating the hydrogen in the first place, and to achieve this it would be necessary to burn more normal fuel!
The second claim is far more plausible and does have roots in scientific fact. This claim says the hydrogen affects the combustion of the normal fuel to give more complete combustion, thus releasing more of the energy in that fuel increasing the power of the engine and reducing fuel consumption. This is definitely possible and is very similar to LPG fumigation on diesels. With LPG fumigation, some LPG is fed into the engine which burns when the diesel ignites during injection, helping the diesel to burn more completely, thus releasing more power. The hydrogen and oxygen probably do much the same(although I think the claims made by waterboost that it speeds up combustion to be instantaneous and prevents the formation of pollutants is unfounded) resulting in more power being released from less fuel. The difficulty is getting the balance right. If the cell doesn't produce hydrogen and oxygen fast enough it won't have much effect on combustion and there won't be any noticable benefits. If it produces too much, the extra power released by the improved combustion will be more than absorbed by the alternator generating large amounts of electricity to create the gas in the first place. However, get the balance right and there should be noticable gains.
An important part of getting this right is getting the cells working correctly. The ideal voltage for generating hydrogen and oxygen is about 1.2 volts. More than that and the extra power simply heats the water. So, with 14.4 volts (normal alternator output) pushing 20 amps through a cell, 1.2 volts generate hydrogen and oxygen whilst 13.2 volts generate heat in the water (that's 264 watts!). That amount of heat in a small cell would heat the water enough to cause it to give off vapour so that the gas pulled into the engine wouldn't be just hydrogen and oxygen, it would also contain some water vapour, i.e. steam. The big question here is whether the effects on combustion are due to the hydrogen and oxygen, the water vapour, or a bit of both. Personally I have no idea, but I would imagine its not too hard to work out. Anyone experimenting with cells would simply need to take a number of cells and connect them in series. 12 cells would give each cell 1.2 volts meaning that the gas coming from them would be virtually pure hydrogen and oxygen. Fewer jars would mean less hydrogen and oxygen and more water vapour. The trick would be to find the optimum number of cells to give the greatest benefit.
Regardless of whether these things work or not, £500 is a lot of money to spend on something that might show an improvement in fuel consumption. Even if it showed a 10% improvement, how long would the payback period be, even on a Land Rover?