I personally think diesel engines and biodiesel B100 are in the future for us in the US. B100 is being locally produced with canola, sunflower, and soy oils such as at Seattle BioDiesel.

There are some downsides to B100. It can only be used safely down to 35F without gelling issues without using additives such as XC30. With XC30 B100 is stable down to -22F. That's pretty significant because it will allow the use of B100 in the majority of the US 365 days of the year. Obviously more research is needed in this area but initial results are very promising, much more than pure hydrogen power.

Since biodiesel is currently made with plant oils some are worried that growing plants for fuel is detrimental. I would agree in the long term. A group from UNH ran the numbers using 2004 data and found that we can produce B100 with Algae (read it; it's a good read) using just a small percentage of the land we currently farm on. Not only that, but the land used is out in the desert where it currently is not being utilized for anything. The fertilizer for growing the algae could come from human waste, reducing the amount of chemicals needed.

Yes, it will take electricity to make B100 from Algae. Think of all the "power" (in generic terms - includes electricity and fuel) that is used to pull oil out of the ground over in Kuwait etc., load it into boats, ship the boats across the pond, refine it, and distribute it.

The alternative is that we could have home grown algae biofuel around all major cities. Very little distribution necessary. Combine that with some wind and solar electricity and a nuke reactor or two and we are good to go.