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Fit
I would go with the Honda Fit and do as SVO suggested and say you've got this much its from a rebate and if you can't get it for X you'll HAVE to get a Toyota or a Hyundai or a Kia.
Two notes, 1 Hyundai's a reliable but if it breaks parts are somewhat difficult to get your hands on. I was working on one last week and we had to order a part from the dealer and it still took a week to get it(the car rolled out Tuesday after sitting on the lift Monday last week coming down, being rolled out by hand, and lifted again this Monday and staying there till Tuesday afternoon). The second note. . .the Prius is not even close to more FE than the old Insight.
If you are buying new I vote Fit with some negotiations, if you are buying used I would still look at a Fit. If it becomes a possibility the 1st gen Insight is the car to have and the rebate makes it around a 4-6K car. . .
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