Staycation: A travel-free vacation spent close to home. The word--a portmanteau of "stay" and "vacation"--has become increasingly popular since spring of 2008, when gas prices began rising beyond $4 a gallon. (A Google search turns up 215,000 hits.) According to this May 15 Newsweek article, "almost 60 percent of Americans are cutting back their vacation plans because of gas prices."
The word's invention actually predates the current gas-price angst. In the December 2, 2007, issue of its travel-themed magazine, the New York Times archly defined staycation as "a neologism used by modern-day Mrs. Mortimers and real-life Homer Simpsons who choose not to travel and prefer to unravel the mysteries of the world from the comfort of their living room couches." Staycation first appeared in the Urban Dictionary in in August 2006.
Reaching back even further, Word Spy found a 2003 usage (as stay-cation) that may be the earliest published reference.
I'm going to go out on a limb and predict that staycation will be selected as the 2008 Word of the Year.