Or perhaps, what's the ideal setup for a hybrid bike? A mix of road and mountain parts? One or the other?

I've looked at many bikes lately and a majority of them appear to be fitted with Shimano (or SRAM equivilent) MTB components. A few had a mix of road parts with mountain bike shifters/brakes. Indeed, it dosen't seem like there is a road groupset made with flat bars in mind. Does it matter? If it does, why? Are there any downsides to using one or the other on a hybrid bike designed for multi-use scenarios?

How are you going to ride it? Road groups are geared high for speed,MTB groups are geared low for traction. If you want speed,go road. If you want to climb steep hills or haul loads,go MTB.

There is no universal ideal. It all depends on how a specific person wants to ride.

The "flat bar road bikes" all have road components. Not sure why you find them hard to find. Wheelsets, RD/FD, shifters, crankset... road, road, road, and road.

With my limited experience in the bike shopping world I can tell you that this is is not a correct statement. One quick example right here Fuji Absolute 1.4 Flat Bar Road Bike - 2013 - End of season Fuji Savings up to $1800 Off

Well I shouldn't have said "all". But the better ones certainly. Most on the low end are a mix of MTB/road components.

I don't think anything on the Trek FX 7.7 has MTB lineage... all road components.

Yeah, but I hesitate to call the 7.7 FX a hybrid bike, since it has virtually none of the characteristics typically associated with hybrid bikes.

That said I admit my topic was a bit generalized. To be more specific, i'll use the Deore and Tiagra groupsets as an example. I believe those two are equivilent between Shimano's Road and MTB series. Being that they are of the same quality level and relative cost, what makes one more suited to mountain biking than the other?

I think a lot of it is just marketing. Certainly, true MTB components may be built to be more rugged given the application, but on the low end, for recreational hybrids, I don't think Deore vs. Tiagra matters.

In fact, I just ordered a Deore XT M770 9 speed shifter because I was not satisfied with the Tiagra flatbar R440 shifter for 9 speed. Deore XT is Ultegra or maybe even Dura Ace level (700 series). There is a 700 series flatbar road shifter for 10 speed but not for 9 speed. I really don't care if it's labelled MTB or road. Shimano is good about comparative quality based on the number designation.

If a bike has road components, then the flat bars will make it a trekking bike, which is a variation of hybrid bicycle for longer distance road use. An example of a trekking bike would be the Specialized Sirrus, which has slightly wider tires, plus mounts for front and rear racks, plus fenders. These bikes are not known to perform well on gravel roads or trails, but are capable of handling those jobs on a limited basis, as long as the tires are of a reasonable width. With the stiff front forks they are typically equipped with, the ride will be jarring on rough roads and loose gravel can be a challenge for inexperienced riders.

If one were to go into a traditional hybrid (or what I would call, a "true" hybrid), that would be a city bike such as the Giant Roam, Specialized Crosstrail, or Trek DS Series city bikes. They are usually equipped with mountain front and rear derailleurs, yet are geared more for speed and flat surfaces. Their heavier frames, wider tires, and suspension forks are designed to take the abuse that curbs, potholes, construction zones, and dirt roads dish out. And they do this on a routine basis. This is especially true for bikes with disc brakes, which are frequently ridden year round, in many different types of inclement weather. I fall in the latter category, because of the types of road surfaces I must deal with on a daily basis. I plan on adding a true road bike to my fleet at a later date, when I can find places where I can ride it for enjoyment. I hope this helps some.

Thanks for the replies guys.

It seems weird that even after all the bikes i've looked at lately, i'm not sure what a hybrid bike really is! A lot of bikes that seem to fall in this category are what I would describe as road bikes with flat bars.

Perhaps i'm over-thinking it. For what it's worth, this comment did answer my question.

You have pretty much described what a trekking bike really is: A road bike with flat bars. Myself? I don't consider them a true hybrid, as they don't serve a dual purpose. They are mainly designed for smooth pavement.

If you follow your link it says" but with upright geometry and comfort of a mountain bike" That bike is far from a flatbar road bike. I can't unterdtand why Performance markets it as a flatbar road bike. (maybe for the customers too embarrassed to admit to riding a hybrid???) Elsewhere it's called a hybrid not road bike. Fuji Absolute 1.4 2013 Hybrid Bike | Evans Cycles
BTW. it's a great looking bike no matter what it's marketed as.

I went into Performance last night to take a look at the Absolute 1.4. Until yesterday I was getting a Trek FX 7.3 or 7.4 Yesterday I started wavering thinking I wanted a drop bar, especially after a co-worker whom just bought a Sirrus Sport was complaining about his hands going numb on just his third ride. Very attentive salesmen at Performance spent quite some time with me. I think he has me convinced that I want to start with a drop bar. I am so confused now. BTW I received 10 times as much attention and knowledge imparted at Performance then the two traditional lbs I have been in. I was the only customer in all three.

Same here. Not what I would call a flatbar road bike.

As for "hybrid", that is a very broad term that can mean mixing elements of MTB, road bike, comfort bike/cruisers, etc.

As for other examples of hybrids with road components:
Giant Escape RX
Specialized Elite Disc
Cannondale Quick SL2

Almost every maker has at least one model of these performance/fitness hybrids that have mainly road components.

It's all marketing baloney to try and corner different parts of the same biking market

Hybrid,flat bar road bike,whatever.

Who cares? I mean,really,would someone here actually not buy a bike because of the label the manufacturer put on it?