I personally have used alternatives for quite some time before I stopped driving. Started with propane, then went to SVO/WVO. Finally settled on B80 when it hit the Sun stations. But it's too much hassle for most folks and the state screwed the pooch heavily thinking they were helping with their own bio-diesel initiative. They started requiring that all diesel fuel sold in the state have a 5% bio-diesel component. Overnight it stripped the stocks of commercial bio-diesel and pegged the price upward. Thanks guys!
There is a lot of promise in switchgrass. A place near me has done a lot of research on it. It is just not clear the environmental/economic side of growing that much of it.
The cities using sewerage for a bio-diesel stock use bacteria to process. It's probably the most efficient and easy manufacture.
Main problem with algae is extracting the oil and separation from the sugars and other biomass. It hampers production in quantity.
Perhaps I'll be proven wrong but I would bet very highly that bio-fuels will never be the next generation of transportation fuels. I highly suspect the answer comes in the form of progressively improving electric cars matched with more efficient, higher output, electrical grid that incorporates solar (especially if you can get solar satellites and microwave transmission), nuclear, natural, gas, coal, etc.