[XPac2]

Originally Posted by Dreamerish*~

The formula of ethanol is: C₂H₅OH

Its structural formula is: CH₃ - CH₂ - O-H

The hydroxy group (OH) of the ethanol molecule forms hydrogen bonding with neighbouring molecules. (Flashback on hydrogen bonding - strong intermolecular forces between hydrogen and the most electronegative elements - nitrogen, oxygen and fluorine)
Because of its hydroxy group, ethanol is a polar substance. Polar substances dissolve in polar substances, and therefore ethanol is known as the second most common solvent next to water, which is also polar. Up to 100% ethanol can be dissolved in water because of the polar nature of both substances.

The "rest" of the ethanol molecule, that is, the CH₃CH₂ part, forms only weak dispersion forces - no hydrogen bonding. It is the non-polar part of ethanol.
Similarly, non-polar substances dissolve in non-polar substances. Therefore ethanol is able to dissolve both polar and non-polar substances, which makes it an excellent solvent.

Ethanol is commonly used in cosmetics, medicine, food colourings, and cleaning agents.

And by the way, the alkanols which have a longer carbon chain than butanol cannot dissolve in water, because their non-polar part of the molecule (i.e. the part that excludes the OH) is significantly larger than their polar part (OH).

Hope this helps... I'm very tired and maybe my answer doesn't cover everything.

*Macks with you* you just saved my chemistry course, cos this was a question in my early HSC course so thanks muchly!!