SpaceShipOne uses what Scaled calls a hybrid motor. This is because the motor has combined elements from both solid and liquid rocket motors (see How Rocket Engines Work). This makes for a unique motor capable of accelerating SpaceShipOne to twice the speed of sound. But the fuel it burns to do this is even more interesting.
All types of rocket fuel are made up of two components: the fuel and the oxidizer. By adding a large burst of heat to the fuel, then introducing the oxidizer, you get the sustained explosive result that will propel a craft into space. In solid rocket fuel, the oxidizer is embedded into the fuel; in a liquid system the two components are stored separately on the craft and combined during ignition. The problem with this latter system is that traditional fuels and oxidizers are expensive and dangerous to store. To cut down on both cost and risk, SpaceShipOne is propelled by a mixture of hydroxy-terminated polybutadiene (tire rubber) and nitrous oxide (laughing gas). The rubber acts as the fuel and the laughing gas as the oxidizer.
The inherent properties of laughing gas help save a few more dollars on the project. Nitrous oxide self-pressurizes at room temperature. This makes it unnecessary to outfit SpaceShipOne with a complicated system of pumps and plumbing to combine the oxidizer with the fuel during flight.
In the next section, we will get inside SpaceShipOne.