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"Her car does get an honest 45 MPG which I attribute to two factors: The engine runs at a constant speed to charge the battery pack (at optimum efficiency) and the Prius wheel motors turn into generators when you slow down, using the car momentum to recharge the battery pack."

Close. It uses an Atkinson cycle variant of the common Otto-cycle internal combustion engine. That yields about a 15% efficiency gain right there. The peaky personality of these engines would render them undrivable if it weren't for the clever differential-like electronically continuously variable planetary gearset, which as you say maintains the engine in a narrow speed band for maximum efficiency. Regeneration is another advantage, as you also point out. But then there's another thing: the gas engine need only be sized for pulling the car at-speed. For burst-power needs, the electric motor contributes. So the gas engine doesn't need to be oversized in order to accommodate acceleration, passing and hill-climbs. As a consequence, the Prius is quite a drivable vehicle. It is also very roomy, seating four adults quite comfortably and five when needed, with a cavernous cargo area. And one last thing: the a/c is electric, so the engine doesn't have to run at idle at stops in order to keep the cabin livable. (Flip side: since the engine's coolant provides heat to the heater as with all other cars, turning the heater setting up can make the engine start to run!)

Lots of Freepers get all gruff and dismissive about the Prius because it's, well, kind of the ultimate Al Gore-mobile. But it's a nifty car, very easy to live with, and competitively priced compared to others with equally capacious cabins.

I drove a Honda Civic Hybrid for an afternoon, in both stop-and-go traffic and on the (urban) freeway. It was a little unnerving at first when the engine shut down at intersections. I got used to it.

It had a "capacity" charge meter, plus an "instant" meter that showed whether it was charging or discharging the battery. So, I could see how it was reacting.

It was on the freeway that I could see the real advantage: when I lifted my foot off the accelerator, the "engine braking" that we all expect was used to charge the battery. When I stepped on the accelerator to speed up slightly, the electric "assist" kicked in, then settled back to normal when I was cruising at the new speed.

There was no need to jam more gas into the engine to make minor speed upward speed adjustments. It was like running on cruise control on a flat, open road all the time, when I get my best mileage in a regular car.

I reset the "average gas mileage" meter when I got into the car. Over my entire trip, I exceeded 50 miles/gallon.

I don't know if the additional cost and complexity is worth it at current gas prices. But, as the technology becomes more common (and cost goes down), and the price of gas inevitably goes back up, it will probably be standard on almost every car -- just like automatic transmissions.