Engines have long been able to run on compresed air, but with little efficiency. In the last decade or so, car designers have been tinkering with a more efficient, double compression system to make a green vehicle.
MSNBC did a piece on them a couple of years ago. Wikipedia has a good entry on them. And here is the piece from The UK Sunday Times from last year.
Apparently leading the market is the French-made MDI Air Car, with competition coming from the Energine Corporation's Pneumatic Hybrid Electric Vehicle (PHEV).
Like hydrogen, air requires an outside power source to become fuel (to compress it). If that outside power source burns carbon, the vehicle is not pollution free; if the outside source is green, the car is potentially pollution-free.
The crux of the vehicle's value hinges on EROEI (and whether it burns carbon). As a future concept, it sounds exciting.