A lot of bad info in this thread. My wife is Canadian and she just flew back to Canada for Christmas so we have done a lot of research on this one.
You will need a passport to come into the USA from ANYWHERE outsite the US-50 by air effective January 23, 2007 (Mexico and Canada included). The same holds true if you are a US citizen leaving the country then coming back in. You have until January 1, 2008 if you are driving across. Kids are not exempt either - they need one also.
Though it has been pushed back and pushed back, January 23rd is the final date for air travel - period.
Here is the link:
http://travel.state.gov/travel/cbpmc/cbpmc_2223.html