So, the first big step on my path to a greener life was to buy a Prius. I'm lucky, and I didn't have to sell the SUV to afford the Prius, so we can still use the SUV when we really need it. If I weren't so lucky I would replace the SUV and rent or borrow one when needed, which turns out to be only a handful of times a year.
Recently a friend gave me a hard time and asserted that my family's three cars pollute more than her one car. We have the SUV, a Prius, and a Honda Civic that runs on compressed natural gas. She has a Volvo station wagon. We drive more than she does. We pollute less.
So if you're thinking of buying a new car anyway, shop green. You can find a green rating of cars at Yahoo Auto (this list was compiled by the folks at Environmental Defense, so you can rely on the information here).