Take a good look at Southwest. Their current program has 24-month rolling expiration, credits per segment so that short hops are amply rewarded, and of course no luggage fees. 32 flights in a year get you automatic check-in (with early boarding) and priority lines to security checkpoints. International partnerships are in the works, starting with WestJet (the Canadian version of Southwest) in 2009.

An overhauled program that Southwest calls Rapid Rewards 2.0 is due out about year from now, well within the current 24-month expiration window. I'm expecting the new program to be points-based, possibly with a more favorable expiration policy. When they change your credits into points, any expiration clock will likely be reset to zero.

The bad news is that points earned in RR 2.0 will be based mostly on ticket price, meaning that short flights won't be as favored as they are now. However this will still be far, far better than a mileage program without the 500-mile minimum. (A 300-mile flight typically costs about 1/3 of the price of a transcon.) Redemption will cost more, at least for today's short-haul customers, but it will be based on cash ticket price. This will eliminate the problem of capacity controls, because redemption prices will reduce members' redemptions of awards for peak travel times. It's all rather clever.

Watch the Southwest forum for a possible signup bonus (could be up to 8 free credits, based on history) tied to Southwest's March entry into MSP. And there are several offers that give you 16 credits for first use of a new Southwest credit card, so don't settle for the 8 credits + 8 for balance transfer.