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Originally Posted by Bill
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Hydrogen fuel itself comes with its own set of major challenges. Perhaps the biggest is that unlike propane (for example), hydrogen at room temperature can't be liquified at any reasonable pressure. That means you have to maintain it at very low temperatures, often not far above absolute zero. Think about what this means for your neighborhood service station. No longer can they drop a thin steel or plastic tank into the ground. The tank must be very strong, and highly insulated, and may need a cryogenic refrigerator on site to keep the temp low. And of course you have to do the same thing in your car. Putting a tank like that in your car is a major undertaking - think of the size, weight and cost of such a tank.
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Bill
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There is a lot of recent research going into storage of hydrogen by absorption, that is, storing hydrogen gas in a solid matrix. There is probably a ways to go with this, but it solves the problem of having to store it at ultra low temperatures. Also, if a tank does rupture, not all the hydrogen leaks out at once where it could potentially combust, making it much safer.
Bill's right about the amount of electrical energy it would take to make hydrogen from water. I envisage huge hydrogen production farms in the middle of oceans around the equator continually using solar panels to make the electricity to make hydrogen. Solar panels are not nearly efficient enough yet to make this feasible though, as far as I know. And then you have the durability of these solar panels bobbing around in the middle of the ocean, hurricanes, typhoons, etc etc. So, my vision is probably a pipe dream.