MPG data from
http://www.fueleconomy.gov, the rest of the numbers are from google.
1989 Ford Taurus: 2.5L 4 cyl, 3050 lbs, 90 hp, 21/27 mpg
2005 Ford Fusion: 2.3L 4 cyl, 3280 lbs, 160 hp, 24/32 mpg
I'd say in the last 20 years engines have become more fuel efficient. Nevermind the extra 70 hp to pull that additional 230 lbs around.
And JC's right... it's the consumer's lust for power that means today's motors make more power instead of more mpg. A modern turbo-diesel car makes nearly 50 mpg in Europe, where people care about mileage. That's quite a bit better than just 10 years ago, and it's due to the massive advancements in computerized combustion control. If mileage really sold cars, we'd see gasoline motors making 100hp and getting 45 mpg. But until the last 2 years or so, people didn't care (and I would contend still don't really...) about milage, so we have 200 hp motors that get 30 mpg.
Edit: this post was started like 2 hours ago... that's what I get for putting out fires at work instead of posting!