Top 10 Most Fuel Efficient Cars to Buy with "Cash for Clunkers" Money
5. Smart Fortwo - MPG: 33 City/41 Highway/36 Combined
4. Ford Fusion Hybrid - MPG: 41 City/36 Highway/39 Combined
3. Honda Insight Hybrid - MPG: 40 City/43 Highway/41 Combined
2. Honda Civic Hybrid - MPG: 40 City/45 Highway/42 Combined
1. Toyota Prius (hybrid) - MPG: 51 City/48 Highway/50 Combined
The 2009 Toyota Prius (2nd gen) would also rank #1 on this list with 48 City/45 Highway/46 Combined. Since demand is higher than supply for the new Prius hybrid, it might be hard to find one (there are long waiting lists).
This list is based on the EPA's list of the Fuel Economy Leaders for the 2009 Model Year, but it is different because I used combined MPG to rank the cars instead of city MPG, and I included some 2010 models (the 3rd gen Prius hybrid, Honda Insight, and Ford Fusion Hybrid).
For More Information About The Car Allowance Rebate System (CARS, aka Cash for Clunkers)
For more information, see the CARS website. Comsumer Reports also has a list of eligible vehicles that they would recommend, and Edmunds has a page with info on how the program works. Wikipedia also has a very good overview of Cash for Clunkers, from the legislation to the cars that are eligible.
More on Cash for Clunkers
T. Boone Pickens and Ted Turner Suggest "Cash for Clunkers" for Coal Power Plants
Bill Clinton Suggests "EVs for Clunkers" at National Clean Energy Summit
Cash For Clunkers Breaks Its Bank in Less Than One Week (UPDATED)
How To Turn Your Car Into A Clunker: Kill a Cyclist