[sc00ter]

If you're going to talk about it, you might as well get it right. Yes, "who" is the subject form and "whom" the object form, but "you" is clearly the subject in this sentence - "you hang"; subject-verb.

"Who do you hang with?" sounds more correct than "whom do you hang with?", but only because of that trailing preposition. Use "With whom do you hang" (as has been mention elsewhere) and we're all square.

But damn those Grammar Nazis anyway; that's not how people speak."Who do you hang with?" works perfectly well for me, gramatically incorrect or not.