BMW officially announces the BMW Hydrogen 7 {Autoblog Green}

Sep 12th 2006 6:00PM "Hydrogen is readily found as a component of water. To make the BMW 7 concept available to users in an affordable manner, we need to find a method or catalyst to convert H2O into its components."

We have. It's called Electrolysis.
http://en.wikipedia.org/wiki/Electrolysis

It's very inefficient.