I've just seen my first fuel cell powered bus. They're currently being tried out in nine cities across Europe. How exciting is that? Of course, there's still the problem of how you make the hydrogen and distribute it. According to Transport for London's handy (and not at all over simplified ;-) ) diagram of how hydrogen is made you need electricity to electrolyse water to make hydrogen and large tankers to transport the hydrogen around, so it's not a totally zero-emissions process. Still, a step in the right direction.
More information about London's fuel cell buses.