I have a hybrid (Toyota Prius) and I like it. There is indeed a tax incentive... something in the amount of $2000-2500, but it only applies to the first owner, not someone like me who bought it used. When I was shopping around for a car I found that the Prius was comparable to the other "normal" cars I was looking at, so I didn't feel I was spending a wad more. And I do the Dance of Joy every time I gas up my car.
To tell you the truth I'm not much of a car person. I bought it because I sat in it and it felt right, and the dashboard reminded my sister and me of Darth Vader. I like gadgets, and driving a Prius is like playing a video game. There's a power button. The key is now a cartridge. The controls are now a video screen. The gear shift is now a joystick.
It's also very roomy. I can fit my bike in the back with the seats down, and it makes a comfy bed (though I'm not too tall a person). For the mileage it gets (around 50mpg in the summer, 45 in the winter) it's a pretty heavy car so I feel safe.
The Prius gets a in my opinion.
Also - and this is what the dealer told me so it may be taken with a grain of salt - apparently Toyota is the forerunner in hybrid technology. Starting with the 2004 Priuses (Prii?) they made some pretty good advances in the original technology... both engines/systems are patented, and having the new technology they sold the old technology to Honda. So Honda is using old technology. Just FYI. And when I was researching Hybrids a year ago most of the reports I read said the Toyotas are better than the Hondas.