Anyone see the George Washington Carver special on The History Channel? It was talking about the increased availability and lower prices of Bio and how this one company is making it from soybeans. It mentioned that Rudolph Diesel himself first used peanut oil when he invented the engine. Can't get a much better recommendation than the inventer himself!
BigRed350 is correct - Rudolph Diesel designed the diesel engine with the capability to run on different fuels like peanut oil, soy oil, petroleum distillates, etc. It turns out that petroleum became the fuel of choice for the engine because of availability and cost efficiency.