Snowtires
I would recommend getting snow tires if you plan on any serious winter driving with steep grades involved.
Despite that, we have had our Prius for a few winters here in Vermont, and have yet to put on snow tires. We use our Prism with snow tires for the more serious stuff - I guess mostly because we've been too cheap to get winter tires for the Prius. We use the Prius for commuting in winter along a valley roads, and are fine sticking to main roads and Interstate highways. I agree with the driver from Toronto that says the original tires do fine on ice and snow - at least if it's flatter.
However, if you add a significant grade, that narrow tire with significant weight suddenly turns into a negative. One winter I had to turn around on a steep mountain gap road (Roxbury Gap) because the tires couldn't get enough traction to pull the vehicle up the hill. There wasn't too much snow, it was mostly just icy. Once the tires began to spin, the traction control would stop the spinning and suddenly the tires weren't doing anything to pull me along. This was a surprise for someone used to using mild S-turns to keep spinning a car up an icy slope. This technique was not an option with the Prius. From years of driving gaps and steep roads to ski areas, I am certain I would've made it farther without that traction control - though I still may not have made it. On steep slippery roads, the only way to go is snow tires.
Of course, traction control - or at least antilock brakes - just saved us coming back from Boston this past Friday. We were descending perhaps the steepest hill on I89, with horrible road conditions (constant misting rain with temps around 26 degrees F), and were suddenly faced with cars stopping in front of us because an SUV went off the road and flipped. I thought with the black ice and the car's momentum we were going to nail the vehicle in front of us, but the antilock brakes kept is in a very controlled skid (no feathering brakes!) that stopped us well short of collision. We had an issue with the other car, so had to take the Prius for the trip despite weather prediciton.
The upshot, I believe the tires do fine in snow and ice, but add a significant grade and forget it.