It was once said that to drive in Thailand you had to have nerves of steel or no common sense! While things aren't that bad today, the standard of driving in Thailand is still shockingly bad and road accidents are still the number one cause of death in Thailand. In particular, the annual holiday periods of New Year and Songkran (April 13 - 15) often see more than 400 fatal accidents; so if you are going to drive in Thailand, be warned.

Long Distance Transportation

On the other hand, Thailand's transportation system is both superb and inexpensive. With low cost budget airlines it is now possible to fly all round the country for $100 or less. However, if flying is not your thing, and you want to see some of the country, then most people elect to go by bus (although, truth be told, bus drivers can be a bit 'hit or miss'). Finally, provided time is not an issue, Thailand's antiquated rail network will get you to your destination (eventually).

Added March 2007 by Adrian:
It is true that by European standards Thai trains are fairly slow ( largely because they run on narrow gauge and the track is usually single line) but they are safe, clean and if there is any onboard food it is usually very good. The rail network is also cheap.It compares well with adjacent countries, even Malaysia.
Unless I fly, the train is the best option for travel around Thailand as long distance travel by bus is unacceptably dangerous because of widespread drug and alcohol use by commercial drivers and an indifference to basic road safety.

Town Transportation

These days Bangkok has both a wonderful mono-rail sky-train system and a superb underground service accommodating those who travel around the Central Business District. Both of these services are fast, clean, and cheap ways to get about quickly.

Beside these, Bangkok and most tourist destinations also have very cheap and efficient local bus services and metered taxis (note: if the taxi does not have a meter, it is an illegal operator and you should not use it).