So... what are you going to be doing July 27, 2011? If you really know, I'm going to be both impressed and depressed
I'd renew it. It's only been expired for a year or so, and with the changes in the law, if you want to go to Canada or Mexico, you'll need it. Besides... you don't want to be trying to get it through at the last minute. That $67 will seem like chump change..
Based on my past experience, when you renew your passport, you'll have to send the old one in. They'll send both of them back to you (old and new), with the old marked so it's no longer valid.