Staying in Portland, we rented a car and took a day trip to do the Mt. Hood Scenic Loop. I definitely recommend it. Mt. Hood is so majestic and the trip along the Columbia River Gorge is really beautiful. Close to the Village of Government Camp we stopped at a trail head for Mirror Lake and took a nice hike to the lake -- around 3 miles altogether. To be completely legal and make a contribution to the upkeep of the great facilities, we bought the $5 Park Day Pass at the visitor center in town. The hike wasn't too hard -- lots of kids and people with dogs on the path -- but the path climbs the whole way up. The path was very scenic and once at the Lake itself, on a clear day you see Mt. Hood and its reflection from the far side.
Going along the Columbia River Valley, I recommend driving on the Washington side if you have time (route 14), especially the stretch between Hood River and Cascade Locks. It is a little slower but the roads are still very good and the views are amazing, with Mt. Hood in the background.