Car manufacturers are constantly playing with all of the following variables to make an engine more powerful and/or more fuel efficient.
1. Increase displacement - More displacement means more power because you can burn more gas during each revolution of the engine. You can increase displacement by making the cylinders bigger or by adding more cylinders. Twelve cylinders seems to be the practical limit.
2. Increase the compression ratio - Higher compression ratios produce more power, up to a point. The more you compress the air/fuel mixture, however, the more likely it is to spontaneously burst into flame (before the spark plug ignites it). Higher-octane gasolines prevent this sort of early combustion. That is why high-performance cars generally need high-octane gasoline -- their engines are using higher compression ratios to get more power.
3. Stuff more into each cylinder - If you can cram more air (and therefore fuel) into a cylinder of a given size, you can get more power from the cylinder (in the same way that you would by increasing the size of the cylinder). Turbochargers and superchargers pressurize the incoming air to effectively cram more air into a cylinder. SeeHow Turbochargers Work for details.
4. Cool the incoming air - Compressing air raises its temperature. However, you would like to have the coolest air possible in the cylinder because the hotter the air is, the less it will expand when combustion takes place. Therefore, many turbocharged and supercharged cars have an intercooler. An intercooler is a special radiator through which the compressed air passes to cool it off before it enters the cylinder. See How Car Cooling Systems Work for details.
5. Let air come in more easily - As a piston moves down in the intake stroke, air resistance can rob power from the engine. Air resistance can be lessened dramatically by putting two intake valves in each cylinder. Some newer cars are also using polished intake manifolds to eliminate air resistance there. Bigger air filters can also improve air flow.
6. Let exhaust exit more easily - If air resistance makes it hard for exhaust to exit a cylinder, it robs the engine of power. Air resistance can be lessened by adding a second exhaust valve to each cylinder (a car with two intake and two exhaust valves has four valves per cylinder, which improves performance -- when you hear a car ad tell you the car has four cylinders and 16 valves, what the ad is saying is that the engine has four valves per cylinder). If the exhaust pipe is too small or the muffler has a lot of air resistance, this can cause back-pressure, which has the same effect. High-performance exhaust systems use headers, big tail pipes and free-flowing mufflers to eliminate back-pressure in the exhaust system. When you hear that a car has "dual exhaust," the goal is to improve the flow of exhaust by having two exhaust pipes instead of one.
7. Make everything lighter - Lightweight parts help the engine perform better. Each time a piston changes direction, it uses up energy to stop the travel in one direction and start it in another. The lighter the piston, the less energy it takes.
8. Inject the fuel - Fuel injection allows very precise metering of fuel to each cylinder. This improves performance and fuel economy.