Easy Answer: Ever considered peeing in the shower?
An average toilet flush takes about 3 gallons of water, according to the USGS. So there's water to be saved.
The easiest and cheapest way to reduce the amount of water you flush down the toilet is pretty simple: flush less often.
You've probably heard: "if it's yellow, let it mellow"; just know you'll probably have to scrub your toilet more often to keep it clean.
And, if you're feeling really ambitious (if that's the right word?) consider peeing in the shower. (I'm assuming this would also increase your bathroom cleaning time by a bit.) The Brazilians make it look so fun!
You can also reduce the amount of water your toilet uses.
The cheap way: Put a recycled 2 litter soda bottle or half gallon milk container in your toilet tank. It could save you hundreds of gallons of water each month. Just be sure to flush before you put the bottle in the tank. And don't use a brick; it can disintegrate and cause problems.
The more expensive way: Install a low flow toilet. Some cities will send you a rebate if you replace your standard water-hungry toilet.