I expect to see the econoblogosphere flooded with this in the near future: John McCain is proposing a $300,000,000 prize to anyone who can come up with a revolutionary car battery.
Well, at least it's not 300m in up-front handouts. And it looks like there are pretty stiff requirements. And it's certainly better than billions and billions in biofuel subsidies.
...You know, I don't really mind this. There are positive externalities that arise from finding substitutes for oil (increased national security, improved environmental quality), so government intervention is justified. The only caveat is why is the government picking winners, but we're rewarding ex post and not ex ante, so I'd expect less waste relative to subsidies.
Really, the incentives here aren't bad. Admittedly, it could be a waste of the money, but do your research and pick a good target, and you're minimizing that chance, and the rest of the ducks are lined up.