Diesel is very much the way for us to go, for the reasons you list, plus a few more. Not the least of which is that the crops that people keep talking about during into ethanol, which only has 70-80% the potential energy of gasoline depending on water contamination (it's a hydrosorbic material, it sucks water out of the air, that's why all the flexfuel vehicles have wonderalloy or synthetic lined tanks and fuel lines), could instead be turned into biodiesel, which has almost the same amount of energy as diesel. I forget the exact number, but it's something like 97%+ comperable.

Unlike ethanol, which is an energy negative process, biodeisel is almost energy neutral. What you need is:

vegitable oil (from pressing, not cooking the stock)
ethanol (you do need a LITTLE)
lye (it's a catalyst)

All three of which you can get out of corn. (Lye comes from burning the stalks.) If we are going to put the acerage under the plow, we should at least get the best bang for our buck.

And unlike gasoline alternatives, nothing has to be done to an existing vehicle. No need to open the carb nozzles or reprogram the fuel injector, no need for fancy fuel lines. Every deisel on the road today could be filled with 100% bio and roll away happily. And if we get the additives out of deisel that make it stink (so people won't use it instead of #2 oil in their heaters, which works just fine), deisel runs cleaner, bio even cleaner.

And my favorite- you've got a fuel leak, BIG DEAL! Biodeisel is biodegradable.

Of course, if you were willing to sacrifice a little in performance, and do some higgery jiggery under the hood with changes to glow plugs and the like, you could run off of straight vegitable oil. An unmodified deisel will supposedly run off super pure vegitable oil, but it gets funky below freezing. Once upon a time, the olive oil merchant was rich becuase his product was used for light, cosmetics, food, et al. Corn and soy oil could do the same in the future, particulalry if someone would slap the anti-genemod luddites until they shut up, and we could get a corn specificially designed for oil production rather than starch production.