Hi,
I don't know how the US version of the Prius II is being rolled out, but here in the UK the rear seat armrest doesn't stop at the horizontal, it carries on until it "rests" on the rear seat itself.
This means it angled downwards and is totally useless as an armrest because you can't comfortably rest your arm on it.
I brought this feature to the attention of Toyota Customer Services and pointed out that page 27 of the current UK Prius brochure shows a rear seat with the armrest in a perfectly horizontal position.
Of course no-one else has reported this feature, but they'll pass my feedback to the design people, but because all the cars are coming out of manufacturing in this state they can't [afford to] do anything about it.
There's probably some small print somewhere that states that the pictures don't show what you'll actually get.
All this is a shame because I really love my Prius, but the gloss is taken off it a little bit by poor design of the rear armrest and also of the front central armrest/storage box (Have you tried driving safely while your front seat passenger opens this box to retrieve something? - it's OK until you need to turn the wheel).
Sorry to be such a whinge - I just needed to get this out of my system.
I feel better now, and my in-laws (both in their 70's) will have to rest their arms on each other in future!

Your post made me go look at mine, and the American version is the same. But try this, take out the middle headrest, put it on the seat and put the armrest down, perfectly horizontal.

There may be a safety reason for the armrest sitting the way it does, but who knows? I'm very happy with the design of the prius, even with the front storage box.

P.S. New Beetle cup holders were very poorly designed until 2002, I think, when somebody got wise at VW and made the cup holder actually "accessible" to the driver and passenger by putting it on a horizontal hinge. And in pre 2001 New Beetles, the side rear view mirrors created a very dangerous blind spot on the drivers side when sitting at an intersection at a slight uphill angle: you could not see the car on your left...... all you saw was an image in your mirror. They lowered the mirrors the next model year. You never know what complaining will do for next year's design.

I questioned the logice behind a rear armrest that behaved the way the Prius one currently does. A friend of mine purchased a new Rav4 earlier this week and his center armrest does not do this. However his center armrest contains the middle seat head restraint. I'm not sure if I like that either. The idea of putting a 3rd person in the back seat of either a Prius or Rav4 is kind of stupid anyway. They might as well make the armrest useful.

It has been said:
Hybrid drivers come in 3 flavors, greenie, techie and cheapie. Pick any 2.
2005 Prius, Melinium Silver over gray, package 5 (AI)