What are the 'easiest' ways to determine functional threshold power? I recently picked up a powertap and have done a fair bit of riding around and a few races now with it on, so I've started to get familiar with some of the numbers. I would like to figure out what my functional threshold power (FTP) is and would like to know which methods are more accurate.

I know a 40km time trial is sort of the gold standard, but I find these so mentally tough that it's nearly impossible for me to give an honest effort outside of a race situation. 

Nothing is going to be easy, I imagine as any interpolated ways of doing this will probably require maximum effort for a certain amount of time, but I'm hoping there is a reasonably accurate method that is easier mentally and physically.
First, get 'Training and Racing w/ a Power Meter' by Hunter Allen and Andrew Coggan. So incredibly helpful in learning about your device. 
Second, use WKO+ for analysis. I have been using it for 4 years and it is fantastic.

In reference to you question, I typically use the 20 min time trial as a good way of setting my training zones. 
After a solid warm up (typically with a 5 min LT--->V02 effort) and then proper rest I do a flat 20 min TT. 
I take the avg. power from that TT (not the norm. power) and multiply by .95 (or take 5% off, whatever is easiest). For example: a 300 watt average over 20 mins would indicate an FTP of 285. 

What I do after that is keep an eye on my IF (intensity factor) and my TSS (training stress score). If that is all gibberish to you I would recommend getting the book!

http://www.peakscoachinggroup.com/Archivedarticles/Determining%20Your%20Lactate%20Threshold.pdf

http://home.trainingpeaks.com/power411.aspx