One way or another, the Toyota Prius. is a symbolic vehicle. For some, it symbolizes how saving the planet can be relatively painless, enjoyable, and hip. You still get the same basic thing (the ability to zip around in a car) but without the guilt and with the important ability to lord it over the less environmentally responsible. Alternatively, the Prius is a symbol for the superficiality of the environmental commitments most people are willing to make. Seen in this way, it reveals how environmentalism is mere tokenism in many cases.
There are two arguments here which frequently become confounded. One is a first-order question about the ultimate sustainability of different energy systems. Is it sustainable to run internal combustion cars using cellulistic ethanol? What about plug-in hybrids charged using big nuclear fission plants? The answers to these questions are ultimately knowable to a high degree of specificity. For any given level of technology, answering them is simply a matter of applying chemistry and physics. The uncertainty therefore lies in estimations about what will be technologically possible at X or Y time.
The second-level argument is much more heuristic and intractable. There is the fundamentally liberal belief that environmental problems can be tackled fairly painlessly through a bit of cleverness and some new hardware. This is a view that takes the Prius as a positive symbol. At the other extreme is the conviction that only massive sacrifice can generate sustainability. The vision in Fight Club of people in rags pounding strips of leather on an abandoned superhighway captures this, and adherents would surely dismiss the Prius as a pathetic fig-leaf.
The latter argument seems to generate a lot more heated discussion, largely because the real meat of analysis on the former question lies in territory where most people cannot hold their own (who reading this could really calculate the efficiency of an energy grid based on photovoltaics, or of an industrial process for ethanol production from cellulose?). The latter debate requires only a will to participate, though it may not do much to leave us with an understanding of which view of the Prius is justified.