11 June 2007 Update!
New passport rules from the state department

Checking the State Department web site, I notice this warning, "Currently, it is taking up to 1 week for passport applications to be tracked online. Please allow at least that time before checking the status of your application." So don't wait until the last moment. Better yet, apply now if you are even thinking about a trip to Mexico in the future. The problem will become much worse once the requirement for a passport extends to other than air travel, currently scheduled for Jan 1, 2008.

8 June 2007 Update!
According to this article,

The demand is such that the State Department has warned applicants to allow as long as 12 weeks for their passports to be issued and up to three weeks for expedited processing at an extra fee. Previously, the maximum wait was six weeks and two weeks, respectively.
Passports are good for 10 years for adults, 5 for minors. Go to the post office this week and get one started if you have any desire to travel outside the US. It will be one less thing to stress over when you do make your trip!

30 November 2006 - Do you have a passport?
U.S. Passport

Just a reminder that starting January 23rd, 2007, U.S. citizens traveling by air will require a passport to re-enter the United States. Travel by other means may need a passport by January 1, 2008, though that date is subject to change. Questions? Need to obtain a passport? Click here for information.

If you are planning a trip by air to Mexico in 2007 and do not have your passport, or need to renew your passport, please get the process started early.

Passport processing time is normally six weeks. Expedited service can be provided for an additional fee of $60 plus all overnight delivery charges. This service will get you a passport in two weeks.
As this new requirement kicks in, I expect the amount of time required to process a passport application will go up. Don't wait until the last minute!