The water actually does boil in little bubbles around the combustion chambers, even though the overall temp of the system remains well below the boiling point. Antifreeze changes the surface tension of the water so the bubbles are smaller, and you get better heat transfer into the coolant. It also contains chemicals to combat corrosion, and raises the temperature at which the system boils over.

Antifreeze is not legal in some racing associations -- they don't want the stuff in the environment in case of a wreck -- so racers often use a product called Water Wetter, which does the same deal to the surface tension.