Toward the end of this decade GM will be adding some new engine options to the H2 and H3 that will help a bit, but until these vehicles are completely redesigned on lighter platforms, it probably won't be enough to turn most people around. GM will be adding flex-fuel capability to the H2 in 2009 with the H3 getting it in 2010, but why isn't it there now? The newly announced 4.5L diesel will also go into the H2 at the same time. If the H2 does continue into the future, and that is by no means a given at this point, it may inherit the two-mode hybrid system coming later this year starting on the Tahoe/ Yukon.
Most likely the only way that Hummer will be transformed from an environmental pariah to at least respectable would be to follow Jeep's lead and come out with smaller lighter vehicles like the Compass and Patriot. However, Compass sales haven't been anything to write home about so far and there is no guarantee that something similar to the Compass would have any appeal at all as a Hummer. GM's best bet might be to just let the H2 and H3 live out their lifespan and then let the brand die.