Closed- and open-loop are terms used in control theory to describe whether or not a system uses feedback to govern its operation.
Open-loop systems make decisions based on before-the-fact input or assumptions but have no idea whether or not they're doing the right thing. An open-loop FI system may incorporate data from sensors in the intake (e.g., temperature and manifold pressure) into its fueling decisions, but it might make the assumption that the flow rate through the air box is some fixed value. This means that at the same temperature and pressure, the amount of fuel it squirts in will be the same. If you put on a freer-flowing air filter and don't reprogram the system to add more fuel, the old assumptions are going to make it run lean. As the filter clogs up, the system will run richer. What you experienced with the carburetors on your K4 and Duc is open-loop behavior at its most basic, and you had to change either the assumptions (jets) or environment (air filter) to make them run well. Carburetors are stymied by having one or two configurations that have to get it in the ballpark of right under a wide variety of conditions and are, by today's standards, a very ham-fisted way to fuel an engine. (And that's when the fight started...
)
Closed-loop FI uses sensors placed
after the combustion process to get an idea whether or not it's making the right decisions. It turns out that the amount of oxygen in the exhaust stream is an indicator of whether the mixture is lean, rich or just right. The oxygen sensors feed that information back to the ECM in real time, and the ECM continuously increases or reduces the amount of fuel in the mixture to get the ideal result. Some systems are even smart enough to use the measurements to figure out the right fueling for each individual cylinder even if they only have one or two sensors. Closed-loop FI is the single biggest reason modern engines are as good as they are: we're loads better at fueling them than we were with open-loop (carb'd or FI).
One thing to note about closed-loop FI systems is that they're actually dual-mode, meaning that they operate open-loop when they don't have enough information to make the best decisions. Oxygen sensors don't work until they're very hot, so the system operates on best-guess assumptions from the time you thumb the starter until the time they start producing meaningful data. This is also why the 1300 won't leave you stranded at the side of the road unless it can't determine the position of the engine or it can't see one of the fuel injectors. For all of the other sensors, it can operate on assumptions based on average conditions. The engine won't run ideally, but it'll still run well.
--Mark