This is quoted from
http://www.snopes.com/autos/grace/sugar.asp
"Sugar doesn't dissolve in gasoline, as a researcher at Berkeley confirmed in 1994. Forensics professor John Thornton labeled sucrose with radioactive carbon atoms and mixed it with gasoline, then spun the concoction in a centrifuge. After the undissolved particles were removed, the liquid's radiation level was measured to determine how much sucrose had become part of the gasoline. The answer was extremely little: the equivalent of less than a teaspoonful per 15-gallon tank of gas.
Because sugar doesn't dissolve in automotive fuel, it doesn't carmelize, and so it does not turn into the debilitating gunk this well-known entry in the revenge canon calls for.
Instead, sugar poured into a car's gas tank stays intact. While sugar could still cause harm if it reached the engine (but in the same way sand would, by virtue of its being a granular contaminant, not because the sugar would turn into a syrup), even that potential harm is generally prevented by filtration. At the end of the pickup tube in the gas tank is a "sock" that blocks solid materials, so the fuel gets through, but precious little that's not liquid does. Further up the line is the fuel filter, and what may have got through the "sock" does not get past it.
Yet, even though the sugar will not reach the engine in either syrup or solid state, it can clog the fuel filter or the fuel injectors, a circumstance which could stop a car. A little sugar in the tank could be dealt with by no more than having to change the fuel filter a few times, but a heavier sugaring would require the gas tank be removed from the car and dumped out. Tom and Ray Magliozzi (the hosts of radio's Car Talk) say it's not a big job for a good mechanic to drop the tank and clean it out; the process would likely cost the car's owner somewhere between $100 and $200. Though $100 to $200 is an appreciable sum, it is a far cry from the wished-for outcome of forcing the victim to have to replace the engine or scrap the car."
They also tested this on Mythbusters (discovery channel) and declared this myth "busted" when they came to the same conclusion.
