It depends on which fusion process we are talking about. The helium 3 reactions are, as I recall, relativly aneutronic -- they don't produce as many neutrons. But you need a fission reactor to make helium 3 (or mine the moon). But deuterium fusion creates radioactive byroducts because stray neutrons are captured by the surroundings and become radioactive.
If you compare it to one of the new designs of fission breeder reactor where the fuel is reprocessed on-site and there are no long-lived isotopes remaining at the end of the reactor life, fission and fusion are pretty much the same as far as nuclear waste goes.
are you talking about daming big rivers or putting paddlewheels in small streams
Smaller rivers and creeks, yes. Paddle wheels no. Usually the solution is the pelton wheel, a small turbine appropriate for small volume hydro projects with about a 100 foot head. We have an enormous untapped potential for local projects like this but state and federal regulations make them prohibitive. And, like you say, it is going to be a battle to prevent them from dynamiting existing hydro plants.
the matter has become a national security issue because oil money has found its way into the hands of terrorists.
I think it's worse than that. The oil money is finding it's way into the hands of US politicians, bureaucrats and media and opinion makers. Former state dept officials typically retire and go to work for Saudi's for big fat salaries -- providing that they made had the correct decisions on the job.
US oil production peaked in the early 70's. This was predicted by a guy in the late 1950's. But I don't think it was caused by a drop in US supplies. The Saudi's quadrupled their oil production in the early 70's and priced it to sell. After we became dependent on it, they embargoed it. So now they have a club to hit us over the head with.
we are currently entering a transitional period from an oil based economy to a hydrogen based economy.
Until someone invents fusion power, hydrogen is not a source of energy. But, yes, that is the reason we will never run out of coal, and for the same reason we won't run out of oil -- we will start using other resources.
But I think there are a lot of other sources of alternative energy that are a lot more economical than wind or solar. The numbers you get from those people are skewed in many ways. Usually they don't account for the tax benefits or the government subsidies.