I think hybrid technology is a great, practical way to conserve fuel. It makes no sense to waste all that energy in braking when it can be used to recharge an energy storage device - a battery pack.
Another technology that is already in production is the all-fuel engine. This can run on pure ethanol, a mix of ethanol and gasoline, or all gasoline. Apparently they are available in Brazil, where ethanol is relatively cheap, and are expected to be seen more an more here in the USA. Other work to reduce the cost of ethanol, making it produced from wood and grass fiber, is also in the works, thanks to advances in biotechnology.
One word, though. I don't think electric power is that cheap, at least not in my neck of the woods. Here in Northern California, residential users, especially those whith gas furnaces/water heaters, get penalied for every kWH over a basic minimum that we use. In this house, I don't think I've ever been able to keep usage under the basic minium (well, a fish pond pump that runs 24x7, an extra fridge in a second kitchen, and a chest freezer, sees to that), but I have been able to cut my consumption in half by upgrading appliances and shutting down phantom loads whereever possible. But with rates exceeding $.20/kWH for higher levels of usage, not sure if this is competitive with gasoline. Of course, there are no gas taxes involved in the electric rates - yet. And, I understand there is a special rate for those with all-electric vehicles, but not sure if it's higher or lower than the normal residential rate, and not sure that the enhanced Prius would qulaify anyway. I think the last all-electric vehicle, the GM EV1, has been cancelled and the leased cars have all been called back by GM to be crushed. A shame.