Re: New to the whole hybrid thing...
I agree with Ken's comments above regarding 26 mpg. Your cousin must be driving with low tire pressures and hot rodding around town or on the highway. Or perhaps, he has found the elusive route that is always uphill. Most Prius owners try to take that route, but on the otherside of the road (the constant downhill side).
If you want to maximize your mileage in town, driving at 41 mph or below with the cruise will yield the best fuel economy, because the Internal Combustion Engine (ICE) runs less below 42 mph and when the cruise control is on. Try accelerating briskly (with our 2002, I floor it) to 30-35 mph to get ahead of the other traffic, click the cruise on, then click up one mph at a time to the speed limit (most surface streets are 40 or 45 mph in Phoenix). Getting ahead of the traffic minimizes the amount of time the ICE runs, decreasing your mpg, and allows you to accelerate more slowly optimizing fuel use without holding up the other drivers (which irritates them to no end). Also, anticipate the next stop light and coast as far as possible (usually up to 1/2 mile) by clicking the cruise down, one mph at a time, clicking when the ICE starts running and maximizing the time the electric motor is powering the car, exclusively.
I drive the same route on surface streets everyday, and someone I know at work asked me one day if I drove a little white car. They said they drove behind me one day, and couldn't figure out what I was doing, taking off like a shot at every light, then starting to slow down halfway to the next traffic light. They said it was kind of annoying, but I seemed to also hit almost all of the lights green, all the way across town. I explained that I was using that technique to get 53.5 mpg. Now, whenever our paths cross on the daily commute, I find them in my rear-view mirror all the way to work.
Wind resistance is the real culprit at highway speeds. On the highway, 55-65 (or even 45, if you aren't in a hurry and/or don't have to worry about getting rear-ended), again on cruise, will yield good fuel mileage. We have a Tundra, which is a huge vehicle compared to a Prius, and different speeds make a remarkable difference in mileage. Driving the same route, Phoenix to Tucson, on I-10, which is extremely flat, at 75 mph, it gets 16.5 mpg. At 55 mph, it gets 23.5 mpg. On the same route, our 2002 Prius gets 41 mpg at 75, and 46 at 55 mph.