California has a pretty notorious reputation for having bad traffic, so I am wondering if it would be worth my time to rent a car when I visit there. If I stay within the LA area, is public transportation good enough for me to get by without renting a car? I would like to visit Hollywood as well, so will I be able to easily get around by public transportation? Or would I be better off to rent a car if I need to get around?
Rent the car!
Los Angeles is built for cars. It has some of the worst public transportation imaginable, ever since General Motors conspired to eliminate the city's trolley system. Yes, there are busses and taxis, but you will find that busses take forever (and get stuck in the same traffic), and taxis are hard to find and expensive.
Only 11% of Los Angeles residents get to work by public transportation (compared to, say, New York with 54%).
There are plenty of cities where public transportation is an option (New York, Chicago, San Francisco), but LA is not one of them.
UPDATE 2015 Since I wrote this answer, the rise of ride-sharing services like Uber and Lyft has, for the first time, made it more reasonable to get around in Los Angeles without your own car. You may want to compare the cost of ride-sharing services vs. renting a car (and paying for parking) depending on how much you want get around. If you are going to a lot of different parts of the city, a rental car is likely to be cheaper, but if you're staying mostly in one neighborhood and not moving around a lot, you may find ride-sharing services to be more affordable.
I've been living in the LA area (in Long Beach, exactly) for 7 months, being there for studying abroad. I made the choice of not buying a car and solely relying on public transit.
Well... as said earlier, LA is clearly made for cars. Most busses don't take the freeways and move rather slowly. It depends on which route and which agency. Also, even if Metro is the primary agency in the area, the whole bus network in LA and suburbs is made up of lines that belong to many different agencies. Nearly every city has its agency, for instance Long Beach is served by Long Beach Transit. You may find express busses that run on freeways on some routes.
Rail transit in the area compounds a single subway line and three light rail lines (these are small trains which run partly on the street like streetcars and need to stop at street crossings, partly on dedicated tracks), all operated by Metro. In addition, there is a commuter train network called Metrolink, which is focused on commuter service (few trips outside morning/evening weekday rush and on weekends, no late night trains).
Luckily, some interesting spots in Hollywood are well served by transit. The Walk Of Fame has a subway stop right next to it, and Universal Studios is linked by shuttle to the next stop on the same line. If you plan on visiting other amusement parks which are popular attractions, Disneyland and Knott's are served by Metro bus from downtown LA, check the website metro.net for timetables. If you want to go to Six Flags, it's tricky. You would need to take the commuter train then two busses to reach the park, including a long layover at the transit center.
Santa Monica by bus is more than one hour away from Downtown LA using the Metro Rapid.
Therefore, if you plan on visiting a lot of different places, get a car. And beware of traffic jams on freeways, especially the I-405! Hopefully if you're not travelling alone, you will be allowed to drive through carpool lanes that help go past single-occupancy traffic.
I have been to LA several times and have used different kinds of transportation: car, public transport, bicycle and walking.
I experienced the city very differently depending on how I got around. I agree LA is a car city and I would recommend to drive around at least once to get a feel for it, but using a bike or walking is always better if you really want to experience a city.
I depends quite a bit on where you are based, sometimes a metro station and useful bus routes are close by or attractions are even in walking distance.
If you have time walking is fine. I walked from downtown via Hollywood and Beverly Hills up to the Getty in the hills. I wouldn't walk everywhere though, some distances are just too big.
Taking public transport lets you get a different feel of the city and its people.
On my last visit (in 2007) I was surprised how many people are now cycling; still a minority but many more than on previous visits.
So even though many locals go everywhere by car, even if you decide to rent one, try the other options as well.
I have lived in West Los Angeles (Culver City) for over thirty years having migrated from the U.S. public transportation king of the hill, NYC. Here's my update for late 2015. The light rail system is improving its reach with each passing year. The Expo line from Culver City opened in 2012 and I use it regularly to get to downtown LA, mainly for the library, the Walt Disney Concer Hall and now The Broad . This line is in its final testing phase to be extended to downtown Santa Monica early next year. The various bus agencies have/will adjust their routes to maximize access to the line.
The Gold line from East Los Angeles through downtown and out to Pasedena is also being extended to Asuza early next year. Here's a nice graphic of the growth of Metro rail from 1990 to 2026.
I would limit bus use to trips of five miles or less. As mentioned in earlier posts it can be long slog to take a bus say from downtown LA to Santa Monica.
I have been bicycling around the West Side streets now for about ten years. You really need to have strong bicycling skills to ride safely here. My strategy is to minimize use of the big avenues and boulevards and use neighborhood streets. These streets are littered with stop signs and they do a great job of keeping cars out. I regularly bike on trips of five miles or less. You can also put your bicycle on racks on the front of the buses here, although during busier times the two slots are many times occupied.
And now we have the emergence of ride sharing programs. My latest experiment is to use public transportation up to a point and then order an Uber. I did this to get from Culver City to the Getty last week. I think this is a great way to get to know the city because all the drivers I have encountered so far are chatty.