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I think the article is right to question the value of hybrid technology, but only to a point.
I don't own a prius, but I borrow a friend's fairly often (I don't have a car at all right now). I do get to feel like I am atoning for driving a 75 Lesabre (8mpg) in a previous life... In a mix of city and highway driving, it does about 44mpg.
Anyway, while there are cars out there now with better mileage and lower emissions, and for cheaper, they are much smaller than the Prius, which is actually surprisingly big inside (not much smaller than my old Taurus in the cabin, but with less trunk). While the fit and the Yaris may beat the Prius on fuel economy and such, they would seem to work better for single people or couples rather than as a family car (although I don't know that I'd want to road trip a prius with 3 kids in the back or anything).
Frankly, for its size, the prius seems like a good price, to get good mileage, and is fun to drive. My only real gripe is it has some pretty heinous blind spots, to the point where I don't know that I'd buy one myself.