Your analysis is correct for switching, however I was in a position where I had no car to begin with (lived in NYC for 8 years) so the choice was simply between buying a hybrid or non-hybrid. Both the US and Colorado have some nice tax incentives in place for hybrids, so I come out ahead within a few years given current gas prices.

As a bonus, I can sneak up on people in parking lots.

The only thing that makes me nervous is the whole battery lifetime/disposal issue that we're starting to hear about more often.

I agree with Jon. I bought a hybrid because I wanted to get the best mileage I could *when I had to drive*, but I take steps not to drive (such as living where I can walk to most of the merchants that I need to visit regularly). I would hope that the people who purchase hybrids are doing it thoughtfully, first trying to minimize their driving as much as possible, then trying to be more efficient when they must drive (including driving less aggressively and being mindful of efficient speeds).

But this is a good illustration of a larger point, that the economics of environmentalism can be pretty difficult to figure out at times. I think only a massive investment in public transit (very unlikely in this country) will make a huge difference w/r/t auto use.