Deano963... I completely agree with you about buying local. The problem in my area is that "locally grown" isn't usually identified as such in the stores, so I end up buying what's there and hoping it was locally grown. When I was living back home in NC, it was always prominently marked as local and I would always buy that for the environmental reasons you stated and because it was almost always half the price.
If my budget allows, I always buy organic (and if I could find locally grown organic, that would just be awesome). However, my budget usually doesn't allow me to go for the organic stuff... or at least, not much of it. I know why its more expensive, but it still pisses me off. I do, however, frequent the local farmer's markets during the growing season for most of my produce.
Even with processed foods, the healthier they are, the more they cost. Some of that actually never made sense to me... for example... if you normally make crackers with salt on them, it costs x amount of money to make them. If you make the very same crackers with the same recipe, but leave off the salt, it costs less to make them because you save the cost of that salt... yet they sell them for a higher price.
Ah, the wonders of retail...