I saw a news ticker on the Saturday AM National News that said the passport office has caught up and is not back on it's normal schedule of processing the docs. It also stated that you must have the passport for flights to Mexico, Canada, Carribean, etc. Nothing was said about the cruises though. I assume the passports are still required as of Jan 1, 2007.
We already have our passports, but our adult children and our grandchildren do not have them yet. We are taking all of them on a cruise in April 2008 and this is a huge expense for passports for 13 more people. I guess we will send in a few apps at a time to stretch the expense, but I keep hoping that they will extend the requirement again.