For drivability, you need low end torque, not high end hp. This is why a diesel would be better than a motorcycle engine in a car.

I've become a fan of straight 6's, myself. Very smooth running design.

Technology is allowing some very large engines in not-too-heavy cars to get very good gas mileage when cruising. My Z4 is a good example. It will get 30-31 mpg cruising down the highway at 80 mph without giving it a single thought. Not bad for 3 liters, 3100 pounds and 255 hp. Of course, a lot of the things that are done to an engine in the name of performance increase its efficiency, so as long as you keep your foot out of it... a really high-performance engine that is tuned for light-load economy can deliver some pretty impressive numbers.

I think it would be interesting to take something like an old 280z (lightweight, ample torque) and convert it to Megasquirt, give it an economy tune and see what it would do. MS + a wideband O2 setup allows a lot of tuning creativity.