Good idea in practice, but the real trick is finding sources of readily availible hydrogen. Electrolysis is one, and solar power can be used to provide a current to separate the hydrogen from the oxygen. Another more readily availible source is fossil fuels, which are composed a carbon backbone surrounded by hyrdogen atoms. This can be stripped of it's hydrogen through various means to be used as fuel (using this in a fuel cell is much more efficient than just burning the fuel).
Fuel cells have been around for a while, but can not yet compete with gasoline in cars in terms of price (due partly to massive subsidies and tax breaks big oil companies recieve). I would love to see a shift towards the use of fuel cells, as well as increased research into making them more efficient and finding ways to get the hydrogen to fuel them, but due to the political/economic factors in this country, I don't see them being used on a large scale anytime within the next decade. Hybrid cars that convert the energy lost from breaking do intrigue me though...with the rising cost of gasoline, this could save a lot of money (and reduce carbon dioxide emissions).