Fuel cell technology (such as GM's) isn't that new, but the problem is that it's not very efficent yet. The "running on water" bit is only true if you don't count the electricty you have to put in it to split the water. The basic idea is that you plug in the car overnight, and it electrolyzes water into hydrogen and oxygen, then you can run the car the next day by reversing the process. Although most solutions just dump the o2 and later pull in new o2 from the air. In this sense, it's effectively just a rechargable battery. That's where our problems come into play, if you store h2 just under pressure (like bottles) the volume you need to make any great distance with a fuel cell is huge. On top of that, you've basically got a shuttle fuel tank sitting in your trunk. Not the safest thing to carry.
What they're working on is hydrogen storage in solid substrates. Basically solid or semi-solid matrixes to which h2 can be easily bonded and unbonded. This would mean that the gas isn't under pressure, and also that it can be stored much more densely, giving you a much farther run than with bottles. Such technology isn't production ready yet, so the only viable short-term option is to have hydrogen filling stations, where you can fill up on h2, rather than electrolizing your own. Then we come to the chicken and egg problem. Which comes first, h2 cars, or h2 stations? How do you convince people to buy/build one before the other is in use?
I still hold that nuclear is the only real solution to the energy problems we're going to be facing. We have new reactor and power plant designs that are incredibly advanced beyond anything in operation. Pebble bed reactors that simply can NOT have a melt down. New ceramic materials that resist corrosion in pumping systems and can last for a century or more. All sorts of nifty stuff.
What we do is build dozens of these plants. We build more than we need. Once they're built, operating costs are relatively low, and the price of electricity starts coming down. If we've built enough, the price becomes extremely cheap... to the point where electricity is practically free to the average joe. Once you've done that, then it becomes reasonable to power cars with hydrogen, as the electricity to make it is cheap. Filling stations would just make their own, rather than have it shipped. Sure, splitting water is by no means the most efficent way to make hydrogen, but it's the cleanest, and the only real cost is in electricity. If that's cheap enough, then everything becomes cheap (and clean!)
At this point we've made electricity cheap enough for just about every energy need we have. It even becomes commercially viable to use it for things like foundries and smelting. (Some places do it with electricity already.) You move anything that was a petrol engine over to fuel cells, and now the only sources of pollution we have left are a few chemical manufacturing plants. No cars, no power plants, nothing is burning fossile fuel.
"But what about the nuclear waste?" First off, that's not a huge issue. The new designs are highly efficent, and the fuel in them will last 50+ years, and unlike old reactors, they can easily be refueled without dismantaling the entire facility. We can then take the used fuel, and do one of two things. We can seal it up and bury it, taking the time to do it right of course. Or we can throw it away. And by throw I mean "launch" and by "away" I mean "into the sun."
No, I'm serious. Take the waste from a single powerplant refueling. It's gonna weigh well less than the payload capacity of a single Atlas rocket. You could literally just launch it out of orbit on a path that it'll send it towards the sun. Gravity does the rest. You could probably send 3-4 plants worth of waste on a single heavy lift rocket. But hey, as long as we're revamping the national infrastructure to nuclear, why not make better rockets too?
Nuclear rockets. "Ooh, but what about radiation?" someone always asks. The rocket design I'm talking about (nuclear-thermal gas-core "lightbulb") has perfectly clean exhaust. All the radioactive material is compltely contained inside the engine, and stays there for 50 years or so. The only exhaust is pure hydrogen, heated a bit hotter than the surface of the sun. There's an excellent article detailing all the designs for it
here but the basic stats are thus:
It's 115m tall (about the size of a Saturn V they used to go to the moon), completely reusable, single stage (nothing gets tossed away) and it has enough fuel to take off with a 2 million pound playload (six times that of the shuttle) put it in oribit, pick up a new payload, and then land on it's own exhaust. Just like the old science fiction rockets, it doesn't glide or anything fancy, just comes down and burns engines to slow and then settles right on it's own tail. The rocket itself weighs 3x what the Saturn did, and all that extra weight goes into safety. It's got 7 engines, but can take off with only 5. It's made of honest-to-god metal, not all that lightweight aluminium foil and such. It'd be on the bullet proof side of things. No piece of foam is gonna take this thing down. Let me reiterate... it can carry 6 times the shuttle, both to AND from orbit, absolutely nothing gets thrown away and (for at least 50 years) the only thing it needs for fuel is hydrogen... which we'll have plenty of by that time. The "reusable" part of it is honestly true too. They say the shuttle is reusable, but by that they mean it only has to spend a year or so being completely rebuilt before it's good to go again. With one of these you could, quite literally, land in the middle of L.A., run some hoses from the nearest 10 filling stations, and be ready to go again as soon as the tank filled up. No special launch gantries are required, no elevators and assembly buildings, just fuel and a nice clear spot of ground.
Now, I'm not the only one clammoring for us to do something like this. The problem is that it takes a massive initial investment of the sort that only the goverment could instigate. That, and people are still afraid of the word "nuclear." But if you look at the amount of money we spend as a nation trying to keep a petroleum infrastructure running... The problem is that politicians don't think more than 4 years to the next election. God forbid they should do some long-term planning.