The Economist reports that train-makers are shifting toward Prius-like hybrid locomotives, but it neglects to mention why until the last paragraph:
Emission regulations for railways have recently been tightened in Europe and will become even stricter in the future. From 2012 diesel trains will have to reduce their emissions of nitrogen oxides by 39% and of soot by 88%. Hybrids may be the only way to meet these requirements.
It also neglects to mention that most diesel trains have been diesel-electric for quite some time; they just lack the massive array of batteries needed to run those electric motors without running the diesel generator.
From what I’ve read, the application of hybrid locomotives (for freight) will be mainly for route segments that involve heavy grades, so that energy can be recaptured rather than wasted in braking on the downgrades. The Economist article suggests another application for commuter lines with frequent stops; however, many of these routes are already electrified and in those cases dynamic braking is already used, and has been for many decades, to return power to the line.
I suspect that even absent emissions regulations, hybrids would be economically justified on some routes purely based on fuel savings.