As American auto manufacturers struggle to deliver clean, fuel efficient vehicles, Volkswagen is set to release the 2009 Jetta TDI later this year. See here. After being suspended after the 2006 model year, the TDI is back and now passes emissions in all 50 states while still offering impressive fuel economy and performance.
TDI stands for turbo direct injection, which in short means that a diesel engine is paired with a turbocharger to boost power output while maintaining excellent fuel efficiency.
Most new "clean diesels" use some form of urea injection to clean up NOx output and a diesel particulate filter (DPF) to remove particulate matter from the exhaust. The Clean TDI doesn't use urea injection, instead making use of a NOx trap and a DPF. The engine control system will periodically change operating modes to purge the NOx catalyst.
The result is 2.0L, 4 cylinder car that achieves 140 hp and 235 ft-lb of torque with fuel economy 30 percent higher than an equivalent gasoline engine. NOx emissions are reduced by 90 percent. The dirty, noisy diesels of the 1980's are a thing of the past while new powertrains are offering a great alternative to gasoline engines.
As an example of real world diesel fuel economy check out this other blog post here. Keep in mind that numbers for a manual transmission are 25% higher on average.