My experience with the Prius has been very good running those 1-2 mile errands if you do all of them in the same afternoon. The engine heats up quickly if it is not freezing outside adn normally after the first 1-2 mile trip the engine will only turn on for a short while and I can easily scoot around on the electric motor only between 30-40MPH. I only need the engine if I need to get up to speed from a light and then run on the motor from there. I find that I actually get better MPG on those trips than my normal commute that can have a lot of fast (70-80 miles per hour) highway driving.

If you don't do the short trips within a short period of each other the MPG will suffer significantly. Just a matter of figuring out how to manupilate the HSD to make the electric motor do most of the miles on short around town trips.