I don't think that biofuels are a viable long-term solution to the energy problem. I did a project on biodiesel a couple of years ago in my biosystems course, and while I can't remember the sources, there were a few interesting tidbits that stuck out.

First of all, there are studies showing that NOx emissions are actually higher in biodiesel than in regular diesel. However, sulphur emissions are almost eliminated. I think overall the emissions from biodiesel are slightly lower, but if you compare to low-sulphur diesels then I'm not sure if it's a significant advantage.

I think the worst part about biodiesel is that there simply isn't enough oil-producing cropland to even begin to generate enough to actually replace diesel. A quick google search comes up with this: "It has been estimated that converting the entire U.S. corn crop to ethanol would only yield energy equal to 12 percent of our gasoline consumption" (http://www.ngvc.org/pdfs/35BilGalWhtPaper.pdf).

All that said, I think that biodiesel does have its place. Not as a long-term replacement for our energy needs, but perhaps as a "tweener" - something to help stretch out the available oil while we work on a real solution.