I just drive without selecting any mode. So by default it remains in ECO most of the time. But while driving on highways with just a slight elevation, the Prius struggles. Is this normal? Is it good to manually change drive modes frequently? Can a forum senior please suggest what modes to choose for different drive conditions (highway, heavy traffic, within town). Thanks.
I would suggest trying them all over a period of time and see what works best for you. You probably won't see a very large difference between them. So relax and enjoy the ride and the savings.
The modes themselves only adjust the throttle response with the pedal, but not really do much more to the abilities of the car. One of the recommendations, pre-throttle when you know you are going to hit a grade, using the momentum to help tackle the grade. Don't forget, the Prius is using a 4cyl engine with an electric motor assist. When on highways, speeds above 40mph will always use the ICE engine along with the Electric motor, and 4cyl engines do struggle with grade hills and your best bet is to hit the hill at a higher speed to use the momentum to keep the speed up at a reasonable speed.
I just got the 2012 Prius Three (less than 2 weeks ago) and was trying to educate myself about how to drive it the most efficient way in different situations. And I do feel the difference driving in "normal" mode vs. ECO vs. Power - I'm using Power any time I need to get to the highway, or going uphill, or passing a traffic on a highway. It works just fine for me, gives me plenty of power. Granted, it's not a muscle car but it does the job better than "normal" or ECO mode. And you are not compromising the fuel economy - the best MPG you will get if you speed up fast to your desired speed (3000-4000 RPM) and than remove your foot off the gas and glide. Once your MPG goes to 100 you can maintain your speed by slightly pressing the accelerator to stay in ECO area. According to a lot of sources (mostly PriusChat contributors and YouTube Prius enthusiasts) that's the best way to get the max MPG from your vehicle. So, getting on the highway I would press PWR, "floor" (kinda haha...) the accelerator to about 70 MPH, release it, look at the MPG gauge going to the 100 YEAH! and than slowly re-press the accelerator to maintain the speed (as much as possible), staying in the ECO area (or better yet, pressing ECO mode). Pulse & glide! Same thing with the hills etc... Hope this helps. Check out some videos about it on YouTube, it's informative.