Should 4-5 PSI really make nearly a 10 MPG difference on the highway?

 

Both of the scions my wife and I own got pretty bad milage (considering it is a 1.5L) the first 1000 miles or so. Make sure you break the engine in really good. I recomend changing your oil at or around 1500 miles, use dino oil for your first change. At around 3500 change your oil again and switch to a high quality synthetic like mobil1 or amsoil. Your milage will be better, unless you keep your accel foot buried to the floor.

 

4-5psi wouldn't make a 10mpg difference; I'd expect 1 or 2, maybe 3.

Another thing about city driving that kills your fuel efficiency is lots of discrete short trips that allow the engine to cool down. Ganging up your short trips, and making the longest of them earliest in your itinerary, will help warm the engine up and improve fuel efficiency.