I've found best not to carry my passport around but rather a photocopy (and of course keep one at one where someone has access to same in case of emergency).

Nowadays if you think the photocopy isn't enough, state department now actually provides a passport ID card that is valid to land travel to Canada but not international air travel. You can carry this around in lieu of photocopy.

http://travel.state.gov/passport/ppt...card_3926.html