Apparently the government has (again) managed to muddy the waters so that no one understands what is really required.
Family and David: You actually don't
have to use a passport until 2008. See the post below from the state dept:
"The Intelligence Reform and Terrorism Prevention Act of 2004 requires that by January 1, 2008, travelers to and from the Caribbean, Bermuda, Panama, Mexico and Canada have a passport or other secure, accepted document to enter or re-enter the United States. In order to facilitate the implementation of this requirement, the Administration is proposing to complete it in phases following a proposed timeline, which will be published in the Federal Register in the near future.
This is a change from prior travel requirements and will affect all United States citizens entering the United States from countries within the Western Hemisphere who do not currently possess valid passports. This new requirement will also affect certain foreign nationals who currently are not required to present a passport to travel to the United States. Most Canadian citizens, citizens of the British Overseas Territory of Bermuda, and to a lesser degree, Mexican citizens will be affected by the implementation of this requirement. "
I still heartily recommend that everybody get one BEFORE then, but it's not required at this point.