In terms of internal combustion I think we are nowhere near the end of development. Homogeneous charge, variable compression, etc is still on the drawing board (that is... not in production). Soon we will also see new valve technologies (BMW has had an electromagnetically actuated valve system in the works for years now).

Plus diesels just keep getting better and better and with the introduction of EGR systems and piezo injectors we are seeing a new era of quite, clean diesels. Unheard of 20 years ago, even.

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---"Why do things have to suck so bad?" a friend once asked me.
"Because space is a vacuum and that's a lot of suck." I replied.
(Actual quote)---