Question: I purchased a Prius many years ago, but many of my friends have put forth claims that the batteries are very toxic and thus I may in fact be creating more harm than good in using a hybrid and that hybrid's are a less sustainable solution than non-hybrids?

How can one objectively measure the total footprint of a hybrid vehicle to determine whether the use of a hybrid over a traditional non-hybrid gasoline powered vehicle is lesser or greater? Has much research gone into the entire picture? For example, when the car reaches the end of its useful life, what happens to the batteries, can they be recycled or are they thrown away? What about the manufacture of the batteries, what negative effects come into play during manufacture? Are there other externalities that I've missed?

Answer: 
So the short answer is to look at '[life-cycle assessment](http://en.wikipedia.org/wiki/Life-cycle_assessment)' studies (LCA). 

The longer answer is to ask what you mean by 'better', and then look at a bunch of LCAs and figure out what impact categories you care about most. 

In either case, the goal of LCA is to collect all the different inputs and outputs for a product for all stages - not just use, but manufacturing and mining and disposal, etc. These impacts are collected into a smaller number of interpretable impact categories. Some impact categories to think about: carbon footprint/global warming potential, energy consumption, ecotoxicity, human health, water consumption. All of these are pretty commonly used. There is a lot of research on LCA methods, both on how to collect the basic data and how to transform it into these impact categories. Two common methods include the EPA's [TRACI](http://www.epa.gov/nrmrl/std/traci/traci.html) or the european [ReCiPe](http://www.lcia-recipe.net/). Ideally, LCA's provide a quantitative and clear answer, but that's rarely true - they are quantitative though, which is really important.

For some of your later questions, particularly around batteries, the answers will depend on the study. The technical terms here are allocation and boundary conditions. Do we model battery recycling? who gets the benefits of it? what technologies are we looking at, and what other products do those produce? What impacts or processes do we include or exclude? There are generally a lot of assumptions, which need to be made and defended to move forward - though often they need to be revised for new technology.

To answer your initial question, there was a poorly done report from years ago that purported to show that older Priuses were 'worse' than a Hummer in terms of energy usage. The report was [debunked](http://thinkprogress.org/climate/2007/08/27/201795/prius-easily-beats-hummer-in-life-cycle-energy-use-dust-to-dust-report-has-no-basis-in-fact/?mobile=nc) all over the place, but it is true that we've gotten better at making batteries over time. New hybrids have much lower impacts than the originals, and keeping the car longer will definitely decrease the relative impact (one of the assumptions is about how long cars last). Check out a newer study [here](http://pubs.acs.org/doi/abs/10.1021/es702178s). In terms of toxicity, here's an [older](http://scholar.google.com/scholar?cluster=8885172735616357524&hl=en&as_sdt=0,39) and [newer](http://pubs.acs.org/doi/abs/10.1021/es103607c) study on the topic - it can take some study to get a reasonable answer, and it's rarely clear-cut. There are almost always tradeoffs.
I find the site [CarbonCounter.com](http://carboncounter.com), developed by MIT, useful in approaching this question. You can play around with some of the assumptions on e.g electricity supply, battery manufacture emissions and vehicle lifetime. Under most reasonable assumptions, for vehicles of comparable size, hybrids are better than pure ICE, and EVs better than hybrids (unless the electricity is mainly coal). So while yes 'it depends', after playing with the options for a bit, a rough rule of thumb for US average electricity is that hybrids are around 2/3 the lifecycle co2 of an ICE, and full electric are around 50% lifecycle co2 of an ICE. (Very roughly)