Diesel is certainly an option. I believe that's how railroad engines work now. They're electric powered with diesel generators supplying the power.

I'd think the pollution problem with turbines would depend on the fuel used. Certainly grain alcohol, propane, etc would put out fewer emissions. My guess is that price and reliability would get better quickly as turbines were used more and more. Plus, the turbine whine would be really cool as you're motoring down the road.

I believe there are a number of companies now that make "wheel motors". One nice thing about having a motor on each wheel is you could do very fine steering by speed control and direction of various motors. Imagine the tight turn you could perform having all your right motors turn forward and all the left turn backwards.