Mike,

Ok, so your intent is good but your understanding of the world is a bit behind. I had the pleasure of driving a sports car for 3 years that would accelerate from 0-60 mph in 7 seconds (that's about 0 - 95 Kph in 7 seconds for you embracers of Gallic imperialism -vs- Anglican imperialism) AND it got much better than 100 mpg (~42 km/l) if you measure consumption from well to wheels (a 30 mpg gasoline car gets about 20 mpg if you look at the whole energy chain from well to wheels - not counting waste during war to defend the oil). It is possible to build an efficient vehicle.

I'll also add that one could use ANY energy source to provide this energy so the assumption of petroleum is simply there to achieve an apples-to-apples comparison.

This performance and economy were possible because of the introduction of an electric motor. Now I don't care how much you tweak, a combustion engine be it diesel, gasoline, turbine, wankel, stirling, etc, you will never get that kind of performance unless you find a way to capture and use the heat lost from the burning in a cheap, moving vehicle. I, of course did assume a stationary co-generation plant for my 100 mpg estimate.

Now that I've briefly brought you into the late 1800's technically, let's look at the economics: Hybrids aren't any more expensive than pure ICE vehicles to manufacture - and they could be made even cheaper than they are today (but that's a different story). There is fundamentally nothing in a Prius that you don't have in your Jetta. It's just that the starter battery is a bit bigger, the starter motor can actually propel the car, and the starter clutch is a bit more sophisticated than would be required just to start an engine. The combustion engine is quite simple and the transmission is much simpler as well.
The reason the Prius is so expensive is that there is so much demand for them in the US that people are willing to wait for 6 months for delivery and pay US$3K over the list price which is already adjusted to recover the R&D costs in a record amount of time. Supply and Demand determine the PRICE of an item (at least in the US).

I can't explain why Europeans are so willing to pay so much for so little when it comes to vehicles and I'll also agree that Americans are equally fickle about paying so much for something so much bigger than they need.

I don't disagree with some of the sentiment's of your wish list but let me take it a bit further:

1) everyone drove at the speed limit; 10-20% reduction;
[(of course, if you drove zero mph, you'd see a 100% reduction but that kind of defeats the purpose of having a vehicle. Slowing down does not improve efficiency. While it reduces consumption, it also reduces output. I'd prefer to find a way to get better efficiency and increase speeds as that will move society along)]
2) if owners of large SUVs traded them in for a station wagon powered by a 1.4 Liter twincharger: 50% reduction per SUV taken off the road;
[(or they could replace their SUV's with strong plugin hybrid wagons -were they available- and achieve better than 500% improvement.)]
3) if every owner of a compact SUV bought an equivalent car instead, about 10-20% reduction;
[(or they could replace their SUV's with strong plugin hybrid cars-were they available- and achieve better than 500% improvement.)]
4) if we switched to diesel, which requires less refining and has a higher BTU content, about 10% overall reduction just from the refining process; [(no argument here between gasoline and diesel but if you added a strong plugin hybrid, you'd see several thousand percent reduction in refining process depending on the energy source, as well as about a 500% increase in the vehicle efficiency)]
5) if people commuted more by mass transit...
[(no argument here but it will take a long time to get the US rebuilt to the point where mass transit works beacuse of so many years of building around the automobile - yep, Europe doesn't hold any monopoly on self-destructive inertia to overcome - we've got problems too)]

Now if you really want to help the planet: Rather than wasting so much effort gushing about how your VW diesel isn't as crappy as everyone elses gasoline car or the minimal hybrids that we've actually been able to squeeze out of a few car companies; instead write letters to your beloved VW to get them out of the 1930's and into the 21st century by selling a plugin hybrid.

Putting down people who have taken a great step towards energy sustainability by purchasing cars that are on the right path, even if they aren't there yet is not helping any of us.

Before diesel can become energy self sufficient, it's economy needs to increase way beyond what traditional engines can do since the planet does not produce enough biomass energy to feed today's consumption. It's going to take some "gee-wiz" technology to seriously reduce our consumption. We need to find a way to implement a 'moores law' for vehicles, similiar to semiconductors. I don't know if you are old enough to remember vacuum tubes but they were not going to get us on a 'moores law' path. Just as we had to replace vacuum tubes with semiconductors, we need to replace combustion engines with electric motors/batteries and then improve the electric motors/batteries. There were die-hards like you who espoused major changes in vacuum technology but they couldn't get on the right improvement curve. There may be other technologies as well that we shouldn't discount but electric is here today and it has been proven to work. The future potential is clear and obvious. We just need to get it into production and on the streets.

I'll leave you with a few simple numbers to remember when comparing combustion engines with electric:

combustion engine: 20 - 25% efficiency
electric motor: 85 - 95% efficiency

Dude: just do the math!