I'm going to respond to most of the issues brought up in this one post. I see a lot of repeating the same old things that everybody should know by now regarding hydrogen.
Hydrogen is an energy carrier, not an energy source. Everybody knows this. No one (who knows what they're talking about) has ever said otherwise. I made a point to compare hydrogen with electricity above, because that's what it's most comparable to. Everyone knows that electrons don't exist freely in nature. Everyone knows that we don't "mine" electrons. Yet everyone uses electricity. Same concept.
Now, why is hydrogen a preferred energy carrier? It is the least common denominator in a variety of hydrocarbon fuels. It's relatively easy to obtain, from the fuels we already use. It is also relatively easy to obtain from renewable resources, as pointed out, by generating electricity first, or by generating heat along with electricity, using solar heat for instance. Standardizing on hydrogen is like standardizing on something like ethernet. For dumb terminals, using serial cables might be faster. For compute clusters, customized hardware might be faster. But, as a standard, ethernet is good enough to be used by everyone.
Hydrogen is also fairly simple to use. You can simply burn it. You can use it in internal combustion engines. In the future, fuel cells may become affordable enough to convert hydrogen directly to electricity at high efficiencies. I know many of you aren't holding your breath for that to happen. But it might.
After carbon, which is undesirable as it forms either poisonous or greenhouse gas on combustion (carbon monoxide/dioxide), and electrons, hydrogen is the most abundant energy carrier on earth and by far the most abundant in the universe.
While electrons are a wonderful energy carrier, hydrogen is the best portable energy carrier. "Storing" electrons, in batteries, is about as easy as storing hydrogen, but hydrogen tanks weigh less than batteries, and will take you farther. It's true that compressing hydrogen introduces losses, but those losses are made up for by the increased energy density of the fuel. That's why the space shuttle doesn't run on batteries. Storing hydrogen on-site is easier even than storing electricity. Bags to store hydrogen can absorb any excess electrical capacity with minimal investment, as opposed to batteries which can only be economically sized to less than the maximum capacity of a RE source.
There are also two issues at hand when it comes to choosing an economical "fuel of the future". One is "creating it economically, energy-wise". And the second is "creating it economically, money-wise". Although these concepts usually overlap, they are not the same thing.
"Creating it economically, energy-wise" refers to the ability to convert low level energy carrier into high level energy carrier without using more high level energy in the process. Many studies have implicated ethanol and biodiesel as dependent on high level energy sources, such as gasoline, to be created "economically, money-wise". They may not be able to be produced "economically, energy-wise". This is because the crops used to produce them are heavily dependent on fertilizers, which are made from oil products. If we have to use 1 gallon of gasoline to make 1 gallon of ethanol, there's little reason to do so. Ethanol has a lower energy density than gasoline. Going from, say, electricity to hydrogen, on the other hand, is going the opposite direction. It's converting a low density carrier to a higher density carrier. There may be reason to do so, for easier storage or portability. Like I said, the feasibility of ethanol and biodiesel is an open question, but it's something to think about for those of us without corn or soybean fields.
Now, that having been said, it should be clear that nothing will ever beat the price of gasoline, except possibly fusion. But I'm not counting on it. Fossil fuels are as cheap as they will ever be. No one will find a way of producing hydrogen, or any other portable fuel for that matter, more cheaply than gasoline. Gas will hit $4/gallon (in the US) and we will still use it, because it is by far the cheapest portable energy source. Hydrogen is not here to rescue us from rising energy costs. The most hydrogen can promise is to help maintain some semblance of the wasteful days we enjoyed in the past. So you can just give up on the hopes of beating the price of gas. That's not an option. The options are 1) terrorism and oil wars or 2) paying more for energy. Period.
And we all know which option our industrialists and political leaders will choose. If we want to avoid option #1, we need to take matters into our own hands as many of you already are doing. Hydrogen is not magic, no more than is electricity. Some would claim that making your own windmills also requires "multimillion dollar labs". We all know that isn't true. Creating and using hydrogen requires no more equipment than what many of us already have. Those of us who accept the idea of a "hydrogen economy" have been waiting for it to materialize for some time. Perhaps its time to take that into our own hands as well.
As for specific ways to produce hydrogen, I agree with the poster who mentioned co-gen, but for a slightly different reason. This rant was partly motivated by my looking at a co-gen system and realizing I'd have to make 10x as much electricity as I actually need to make it worthwhile. What would I do with all that electricity? How would I store it? I also notice that many of you have windmills running 24/7 that might possibly be producing more electricity than your batteries can store. Hydrogen production makes a great dump load. It only requires 2 volts.
But I'm looking around and noticing that the only thing missing seems to be a great way to use that hydrogen. I also agree with whomever said there are a lot of smart people on here who can come up with anything they put their minds to. I'm just hoping some of you will give hydrogen some thought.