Officially passports are only required when flying to the United States. The passport requirement when driving down doesn't go into effect until next year. But border guards are being pricks and enforcing it now and causing people grief if you don't have a passport or valid birth certificate with you.
No, I just crossed the US/Canadian border last night with only a driver's license. However, not having an official (Notarized) copy of your birth certificate with you seems to be a surefire sign that you're going to get held up and hassled and possibly searched/turned away.
Again, all you need to easily cross the border is a driver's license and birth certificate (notarized copy preferred)