My wife and I were going to travel into Canada last spring, but at that time it was right on the edge of the new regulations taking effect. You could travel into Canada with a birth certificate and a driver's license, but not drive back into the states once you were in Canada. We decided to fore go the experience, as it was too iffy for us and there wasn't enough time to procure passports without paying a lot of extra money for expediting.
Since June of 2009, passports are needed for all border crossings according to the information I've gleaned then and since. May as well head down to the post office with $90 or so in hand and sign up.