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Hydrogen would be what you fill your car with. The fuel cell would obtain the oxygen from the air. And yes, water would be the ONLY exhaust (maybe a little oxygen too).
Hydrogen is cheap, and easily obtainable, however it is very explosive as the Hindenburg showed. But, so is gasoline, so I don't see what the objection there is.
Right now it cost something like 3x as much for a hydrogen fuel cell powered car as it's gasoline couterpart, however with mass production I am sure the cost will sink.
The first fuel cell car on the market should be out 2004-2005.
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