Cal,
E85 and Hybrids being a fad are one mans (or womans...) opinion. E85 has the ability to be a good alternative fuel. Development of engines designed to specifically work on this fuel will lead to improvements in milage and performance.
Hybrids are another promising method to reduce the use of gasoline. As to the payback issue, well that's fools logic. You purchase a car for many reasons, milage may be one of them. What's the payback on airconditioning or XM radio? Hybrids provide one alternative to acheive better milage, and in some cases better performance overall. Hybrids may not be limited to gas electric either. Diesel electric hybrids are coming as well as fuel cell hybrids.
Bio diesel is another excellent option. I personally know a guy who has a diesel truck he uses on his farm pretty much exclusively. He actually gets the used frying oil from a couple of restaurants (for FREE

), filters it, and mixes it 50/50 with low sulpher diesel in the warmer months. The truck runs fine, and it really does smell like french fries.
None of these are solutions in themselves, but as we incorporate more and more alternatives, we reduce our dependance on foriegn sources of fuel. Now if congress would quit sitting on their brains and open up Alaska, and more of the coastal areas for drilling, we could start making a serious dent on imported oil.