(Creating a new post for this.)

Overview:
The 2006 HCH has three drive settings: D, S, and L. Naturally everyone stays in D all the time, but I discovered there is one situation in which S can help fuel economy.

If you drive on the highway 70+ mph with 4 or fewer bars on the battery-charge-level gauge, the car often employs fairly aggressive regeneration even when your foot is on the accelerator and you're cruising at a steady speed. If this goes on long enough to recharge the battery then it's used up more energy than it got from the battery when assist was used, so it lowers FE. It also makes driving less smooth and pleasant in my opinion.

Therefore, for long highway drives it's best to keep the battery as full as possible (80% or better, ideally) so this doesn't become a problem. It's difficult accelerating onto the highway without using assist, especially if there's a large hill (and there are many in San Diego) or you like accelerating to 70+ mph and keeping up with traffic.

Well, using S mode makes that easy. In S, you can accelerate with little or no assist. It runs the engine at a higher RPM than normal, so you can keep a light foot on the gas pedal to use no assist but the engine will run at 3000+ rpm and let you accelerate up to any speed. It uses more fuel in the short term but the savings on the battery increases fuel economy in the long term, if you have at least 10 miles of highway driving ahead of you (ideally more). The exact benefits depend on terrain and it's not always best to use S.

When accelerating onto the highway on level or downhill slopes, especially with a full battery beforehand, just use D and you'll be fine; the assist, even full assist, likely won't hurt you. But with a battery that's already half full or worse, or with an uphill slope, I find it's best to use S.

Note that you should only use S when accelerating or going up long steep hills; never cruise in S. Use D in any situation where you'd be using little or no assist, or where you'd be able to go downhill pretty soon and regenerate all the energy anyway. On highways with lots of little ups and downs, just stay in D and use the assist.

Experiments
I did try to do a highway round-trip at around 80 mph to compare the two techniques, and got 37.6 MPG using S and 37.5 MPG using only D. But it was just 11 miles each way; a longer drive would have seen more of a benefit from using S. (Both values were low because it was cold, by the way.)

I did a 40-mile round-trip, also at 75-80 mph, using S to accelerate, and got 42.7 MPG, which is pretty good considering the speed. But I haven't done a D-mode test to compare this to.

Let's move the discussion on this here.

It does use assist at low speeds, yes, though by releasing the gas pedal I can then immediately press it again without any assist being used, but I haven't tried that at speeds below 40 mph anyway, and what assist it did use was moderate. Also usually when I shift into S I'm already moving at 20-30 mph or so, since I wait until I get onto the exit ramp / uphill slope before I engage it.

one tip: don't use S mode unless your state of charge dips below 6 bars
(let's talk bars instead of percent, it's a lot clearer)

between 6 and 8 bars (the maximum charge), forced regen is only 0-1 bars at most, and it doesn't particularly affect your mpg. So feel free to use assist in D, and slowly charge the battery back later. This is perfect for when I'm driving up short but steep hills and there are long, drawn out descents after their crests. I use 3-5 bars of assist up them, charge drops from 8 to 6 bars, and then I recharge on the way down up to 7-8 bars again in ev-mode.

Once your charge drops to 4-5 bars however, forced regen is at around 3 bars and this slows you down much more. Before this happens would be a good time to use S mode, to prevent the IMA from using more assist and forcing you to incur more regen later.

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Another thing about regen at highway speeds between 50-65 mph:

the IMA is heistant to give more than 5 bars of assist when pulling uphill, and if 2200 RPM + 5 bars assist is not enough to hold your speed, it will cut out all assist and the CVT will "downshift" to 3000-3200 RPM to maintain speed.
This happens especially in cruise control between 50-65 mph with a battery state of charge around 6 bars or less. In a way, it is like shifting into S mode, while still in D.

However, if there are 7 or more bars of battery charge, the IMA will continue to feed 5 bars of assist, and the CVT will increase revs to around 2500 RPM but not much more. This is smart.

Now, I've noticed this happen only between 50-65 mph. CGameProgrammer, driving at 70+ mph must shift into S to gain the same benefit. Maybe the engineers didn't have that speed in mind or something, I don't know.

HCH-I owners, I'd like to hear from you too about using S mode on your cars. You guys have S mode too, and you run into forced regen as well So what do you think?

I know I have an HCH-I but I'd like to include other owners too...

Yes, exactly. Those 3 bars of regeneration definitely hurt, though 1 isn't a big deal. If one were really determined to eliminate regeneration altogether, they could coast in D for a bit, use S to get back to speed, then repeat until they're full. Shouldn't take long, though it'll be a bit of a waste of gas, but it is strangely fun driving the car with no regeneration even when coasting. Makes it really feel like it's gliding.

I still get regen in S in my 03. I don't like S because to get to 30 I have to rev to about 2500 rpm. I get beter FE by slowly reving up to 2100 RPM in D.

My hydroponics experiment

You ever notice how hard it is to lip read cartoon characters?
"Crazy is what the sane call Delta Flyer"

It's not that S means you won't get regeneration, so much as that if you need t accelerate up to ~70mph on the freeway, you can use it instead of using up enough of the pack to induce regeneration later on. This would make no difference at slower speeds, or if you will have a chance to regenerate such as an offramp etc. coming up. Also, up to about ~30mph the behavior for "S" and "D" seems to be pretty much the same.