Here is the latest as we understand it to be from the
U.S. Department of State Web site
As of January 23, 2007
U.S. citizens traveling by air between the U.S. and Canada, Mexico, Central and South America, the Caribbean and Bermuda will be required to present a valid U.S. passport, Air NEXUS card or U.S. Coast Guard Merchant Mariner Document.
On or before January 1, 2008:
U.S. citizens traveling between the U.S. and Canada, Mexico, Central and South America, the Caribbean and Bermuda by land or sea (including ferries), may be required to present a valid U.S. passport or other documents as determined bye the DHS.
So, it would appear that passports are still not required for US citizens traveling by car/truck and entering the USA from either Canada or Mexico -- however, we recommend applying for and obtaining a valid passport if you anticipate traveling outside the USA (to anywhere) in the next few weeks!