i've thought long and hard about this myself
lets go back to the basics of combustion
in a car generally when the combustion occurs the piston is in the up position. The explosion causes the gas to expand driving the piston outwards. The friction inside the engine counters some of this force reducing it slightly. But wheres the majority of the efficiency lost ? Simple in the combustion itself. Something like 60-70% of the energy is lost as heat. It either goes straight out the exhaust as heated gases, or heats the engine block up then eventually gets blown out the radiator as waste heat. So you can almost think of cars as giant heaters with a side effect of moving the vehichle forward.
To visit the prius car, which is kinda interesting. It increases the efficiency by using the breaking power to turn a little generator to charge the battery. Normally when you break all the energy of the car is lost as heat in the break pads. But the prius uses this energy before its lost as heat or so i believe.
The key to making cars more efficient besides making them with smaller engines would be to use some of the waste heat. Maybe, you could use a stirling engine to cool the engine block instead of just blowing the heat out the radiator. Using that you could charge up a battery. You could possibly have one on the exhaust also. Only problem is this increases the complexity of the car design and also obviously its cost. Maybe we would all be better off riding 50cc motor bikes

What are they .. 100 miles per gallon ? People never look at changing their life style as an amazing way to save energy.