One thing I haven't seen anyone note is that once any element of the economy (commuter, company, whatever) converts away from petroleum for transport fuel, they are individually immune to further price increases or supply squeezes.  Their upstream suppliers and customers may not be, but the higher the cost of oil goes the more advantage the converted will have in their particular niche.

For instance, suppose you've got an oil crunch that starts in 2005.  By 2010, depletion is running at 5% per year but conversion has been averaging  2% a year and 10% are already converted away from petroleum.  Further productivity crunches will only affect the other 90%, so a 5% contraction in the oil-dependent sector is only 4.5% overall.  By 2020, 30% are converted and a 5% contraction is only 3.5% overall; if the converted are growing at 5% per year (likely if they are much better investments) the overall contraction is just 2%.  Eventually the converted are out-growing the dependent-and-contracting and the economy goes forward again.

The only way we'll have real problems with peak oil is if government tries to maintain the economy on it instead of getting it to switch, e.g. what the Republicans have been doing since cancelling the PNGV in 2001.

I agree with this, though I see it happening somewhat later in the process than you suggest given the sucky energy/weight ratio of batteries (my best guess is that in small to medium depletion scenarios, nuclear power and plug-in hybrids will prove to be the path of least resistance that the market picks, with the plug-in part getting more and more significant over time).
If you think batteries are inadequate, take a look at lithium-ion performance figures.  AC Propulsion did, and they made an electric rocket-car that can go almost 300 miles at freeway speeds.

The problems with Li-ion batteries will be overcome.  The expensive and runaway-prone cobalt oxide cathodes are eliminated by Saphion technology, and nano-fine structures by Altair Nanomaterials and Toshiba have radically increased the cycle life and charge/discharge rates.

I believe the Toshiba battery represents the true breaktrhough in EV technology. I'm surpries it received as little publicity as it did. Is there any reason to believe this batery will fail to live up to its promise? Is it too expensive.

For those who aren't aware of Toshiba's breakthrough in battery technology, here's the link:

http://www.toshiba.co.jp/about/press/2005_03/pr2901.htm

One thing I haven't seen anyone note is that once any element of the economy (commuter, company, whatever) converts away from petroleum for transport fuel, they are individually immune to further price increases or supply squeezes.
I'm not so sure of that. There are a few cases to consider.

1) A switch from gas/diesel to natural gas. Well, hopefully it's obvious how one isn't immune to price increases in this case. For the record, it's a limited resource, it's peaked in North America and it's price is also increasing.

2) Any liquid/fuel cell fuel source. How well does it scale? Yes you can get waste oil to run your car from a restaurant down the street, but what happens when 5% of the population find out about the great savings? Suddenly the reataurant realizes that waste oil is a resource that s/he can sell for far more. And now you effectively have to buy the bio diesel (or algae oil) from a station. Growing demand, but will supply ramp up quickly enough? Sure, in the long term price should/might go down but when it's just becoming popular there could be wild price adjustments. Sure, some could be down, but some could be up.

3) electrical power. Whether compressed air or a battery is used for the energy storage mechanism, have you looked at your electrical bill? I'm getting yearly adjustments to the bill twice yearly for the last two years (better than the quarterly I seem to be getting from the natural gas company). How many new nuclear plants are being built in your area? Does your bill show what percentage of your energy comes from what sources? Odds are you'll see 50% from coal, some from gas, and then some from renewables. Coal will get more expensive to ship, and gas is going up. And without breeder reactors nuclear will also rise. When a lot of people are plugging their cars into the grid, there's going to need to be a lot more electricity produced.

I'm unsure what other categories there are, but one won't be immune from price increases. But hopefully the price increases will be less than the petroleum bound competitors.

Nobody in North America is going to convert from petroleum to natural gas for cost reasons.  At $65/bbl, crude is about $11.00/GJ; natural gas is around $14.00/GJ at the wellhead these days.  There may be fuels like landfill gas which are too expensive to upgrade to pipeline quality or are "stranded" by distance and thus go cheaply, but they're not big enough to turn things.

Waste-derived fuels (both crop wastes and post-consumer wastes) will come into play, but I don't think they're going to be very big over the next 5 years.  There's too much groundwork that's not done yet.

For the most part, the conversion is going to be to electricity.  Electricity can be generated by a host of things and co-generated from many processes which currently just eat the entropy increase in conversion to low-grade heat; if we moved aggressively to make more electricity for less fuel, the amount of low-hanging fruit would allow it with relative ease.