U.S. citizens need a passport to visit Mexico, although sometimes they can cross the border with a PASS Card or a special driver's license that are issued by some border states.
Americans also need a Mexican tourist card (FMT) if they are traveling beyond officially designated "border zones," such as Tijuana, that Mexican authorities have declared visa-free areas for American tourists. Tourist cards cost about $23 (depending on exchange rates) and allow visitors to stay in Mexico for up to 180 days. They are available for land travelers at many well-advertised places along the U.S.-Mexican border, and aboard flights and cruise ships headed for Mexico.
Do not lose your passport while in Mexico -- you may have trouble returning home. This is particularly true for U.S. citizens.
For everyone except tourists headed for the upper-end resorts, driving is perhaps the best way to see Mexico. Americans will need a passport, a tourist card, driver's license, proof of car ownership and notarized permission from any lien holders, Mexican insurance (available online), and a vehicle importation permit (available at the border). The cost for the vehicle importation permit is $15 and must be paid by credit card.
Be careful -- you can be jailed for a car accident in Mexico much easier than you can in the U.S., especially if you have no Mexican insurance.
The age-old theory for international travel is that you should bring half as much luggage as you think you'll need and twice as much money. However, the cost of living in Mexico is generally cheaper than in the U.S. (budget travelers staying at cheap guesthouses report being able to live on $25 to $35 per day).
Nevertheless, any "foreign" product, such as consumer electronics, imported beer or Mexican branches of U.S. chain restaurants, will be more expensive, sometimes exceeding the their cost in the U.S.
