[bdonlan]

The process can be automated using pistons and a redstone repeater, as shown here: http://www.youtube.com/watch?v=_wLuEO6xOM4&feature=playe...

This can produce cobblestone as fast as you can mine it, at a cost of three lava, three iron (for pistons), and a bit of redstone dust (plus items derived from wood, water, and cobblestone, which are all renewable resources)

There are other designs which use even less non-renewable resources as well.

[rcfox]

Ah, I haven't had a chance to play with pistons yet. I guess my knowledge is a bit out of date.