Using hydrogen as a main rocket fuel has poses many problems. The Liquid hydrogen fuel used by the space shuttle for example must be stored at a temperature of −423F /−252C only about 20 degrees Celsius above absolute zero. Liquid methane, on the other hand, can be stored at the much warmer temperature of -258F / -161C . This difference means methane fuel tanks wouldn’t need as much insulation, making them lighter and cheaper to launch. The tanks could also be smaller, because liquid methane is denser than liquid hydrogen saving even more money and weight.
The test conducted in January 16, 2007 burned at supersonic speeds and generated 7,500 pounds of thrust. Although NASA is saying that there is still much work to be done before the new engine could be used for actual space missions they do believe methane based rockets have a very bright future ahead of them.
Apart from its relatively high storage temperature it is also much more abundant and easy to produce than hydrogen and could be harvested from many of the planets in our solar system including Jupiter, Saturn as well as some of their moons such as Titan. Although methane does not exist in large quantities on Mars, NASA claims it could be manufactured on the red planet using a mixture of carbon dioxide and hydrogen, thus allowing a future ship to carry only held the fuel needed for a two way trip to the planet.
NASA is currently exploring various alternative engines including some much more radical concepts such as nuclear propulsion (the Prometheus Project) and even a new antimatter engine design recently reported on in depth by TFOT.