Completely redesigned for 2010, the third generation of the world's most popular hybrid has just begun making its way into Toyota dealerships. After spending a week behind the wheel, we came away convinced that this new bigger and more powerful Prius will remain supremely competitive, despite having to face an ever larger and more impressive group of rivals.

Toyota's is offering its mileage-maxing midsize hatch in five different grades for 2010, running from a late-arriving and still-to-be-spec'd $21,750 entry-level version aimed at buyers tempted by the equally new and slightly cheaper Honda Insight to a leather-lined luxo version that opens at $28,020. We drove a $22,750 Level II Prius, which is pegged to be the most popular. It shares the latest incarnation of Toyota's amped-up Hybrid Synergy Drive powertrain -- now rated at 134 horsepower -- and has the same comprehensive safety systems as the others, but makes do with cloth upholstery, a non-JBL sound system and slightly fewer bells and whistles than found on its costlier kin.

Spacious and smartly-designed inside, the Gen III Prius welcomes adults in both decently contoured front buckets and a comfy 60/40 split-folding rear bench. An abundance of hard but nicely textured plastic is countered by well-padded touchpoints on the armrests and center console bin, while buttons on it steering wheel efficiently toggle multi-functional data readouts that appear on a deeply-shrouded LCD display positioned in the center of the dash.

As in the past, the 2010 Toyota Prius remains better suited to relaxed cruising than aggressive cornering. Its low-rolling resistance tires "seek" a bit on grooved pavement and we'd prefer a more natural feel in the electric power steering and pedal response on its regenerative anti-lock brakes. But overall, it has become an even more amenable travelmate in town or on the freeway.

As for the ultimate numbers game, the 2010 Prius continues to excel there as well. Although a more potent 1.8-liter engine and enhanced electrical boost allow it to hit 25 mph in EV mode and reach 60 mph in about 9.5 seconds, this hybrid legend retains its EPA Mileage Master title, thanks to 51/48/50 mpg city/highway/combined ratings. Our tester easily lived up to those stats, effortlessly returning an impressive 51.6 mpg average in 320 miles of KBB real-world mixed-mode driving using absolutely no special techniques.

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