My un-expert ramblings:
1) keep in mind that one of the problems to be overcome for a "home built" hybrid arrangement is the control (throttling) of the electirc motors. If you have a constant voltage coming from a generator (rectified AC current to approximate DC current), then DC motors are difficult to throttle without fancy electronics, because DC voltage is not easy to transform to varying voltages. One method is to "chop" the current -- provide pulses to the motor of varying time periods but same voltage. But this has disadvantages (I don't recall exactly -- I think for one thing it's hard on the motor / reduces service life).
2) hammersley, your quote on how hybrids work: I disagree with the "generator providing current is more efficient" (paraphrased) part or the quote (I know it's not your words). The on-board generator is more *convenient*, because it charges the batts more or less constantly, no one wants to stop and wait for 4 hours at a rest stop while their batteries charge up from grid power. But the gas engine / generator is not more efficient, in my opinion. If it was, we'd all provide our own electricity at home with gasoline generators and say screw the utility! Granted, grid electric power is notoriously inefficient also (I forgot the numbers, but I think it's like 15% efficient, by the time the electrons reach your house, considering thermodynamic losses at the plant and transmission losses over the power lines).
3) whoever suggested just using their full-size engine and put electric motors in-line: one of the main features of hydrids is that you can shrink the gas (or diesel) engine way down, because the electric motors can "take up the slack" during high power demand times like climbing hills and accelerating away from traffic lights. By shrinking the engine, you lighten the vehice significantly (although battery weight offsets the savings), which increases mpg, and the engine can then run at ideal throttle (generally high efficiency) for most of the time it is running. Keeping a large engine and putting it in a hydrid system won't be ideal.
4) one of the reasons trains use diesel - electric hybrid system is the tremendous amount of torque the elect motors produce at 0 speed (as someone pointed out on this thread). Quite an advantage for getting a train's huge mass going from dead stop. Plus trains don't have to stop-and-go at traffic lights like cars do, so no need for batteries on the hybrid system on trains to give that extra acceleration boost. No "dragster locomotives" out there, as far as I know (cool thought, though!).