I live and work in Seattle.
I gave up my car when I went back to college, mainly to save on insurance costs. After college was over, I didn't have any money to re-insure my car, so I kept commuting by bus. And then, I just never stopped.
Practicality & Convenience:
Now, my commute to work is just under 3 miles. It takes 10-20 minutes by car, depending on traffic, and 20 minutes by bus no matter what. Times of day with heavy traffic, the bus moves faster than general traffic, because the city has dedicated lanes in places, dedicated traffic lights in others, and various other advantages designed to keep the bus moving when traffic is gridlocked.
There are several bus routes with stops within a quarter mile of my home. From "my" stop, it's about 5 minutes to a major transit hub, where I can transfer to virtually anywhere. However, "my" buses only run at 30 minute intervals (and are synchronized in their departure times by some perverse coincidence), so I have an average of a 15 minute wait for the bus, each way. Most of the buses I transfer to at the transit hub run with much more reasonable 10 or 15 minute intervals, so I rarely have downtime waiting for a transfer. So time-wise, I don't lose much more than I would looking for parking.
I can read while I ride. Can't do that while I drive. Many of the buses have free wifi; I can post to /. while riding.
The buses run from 5 AM until to 1 AM, leaving me a 4 hour dead-zone. Obviously I can't haul large objects on the bus.
For these inconvenient occasions, I have a couple options. I can call a taxi if I'm in a hurry or the buses aren't running. For hauling things, I can rent a pickup or a van from a nearby U-Haul.
I can always just walk. And I can always (illegally) drive my uninsured car.
Financially:
Insurance on my cheap, heavily depreciated American economy car costs just over $100/mo. That price is for only liability and "uninsured motorist" coverage. I'm sure full coverage with a low deductable on a newer vehicle would be at least twice as much. There's of course gas prices, as well as regular maintenance, which can about double that price, but insurance is really the big cost (for me). I have free street parking at home, but monthly parking around most workplaces can run upwards of $100.
A monthly bus pass, on the other hand, costs $63 a month. That buys me unlimited rides anywhere in the city. On the occasions when I leave the city, I pay a highly reduced rate, usually $.50, but it can be a full dollar or more if I cross a county line. Obviously, that's not part of my daily commute.
Taxis for special trips are affordable, at a rate of $2 + 2.50/mile. For extended downtown errands, it's often cheaper to call a cab than it would be to pay for garage parking, with a car. And if I'm running late and miss my bus to work, it's only a $10 cab fare to get me there. So I can ride a taxi to work several times a month, and still come out on top versus a car.
Renting a pickup, or van, or even a box truck only costs $19.95 plus $0.70/mile. Well worth it on the very rare occasions that it is necessary; I don't have to register, insure, and store a pickup truck just for making dump runs or buying furniture. Most furniture and appliance stores offer free or highly discounted delivery, anyway.
As for these people complaining that transit doesn't work for them, because their service is lousy:
That's not a problem with transit in general, that's a problem with your local government. Get your government to fund and implement a reasonable, modern transit system, and you will find it practical and useful.
Unless you're one of the people with a 1-hour by car freeway commute. Jesus Christ, you seriously give up 2 hours of your day every day for nothing? Damn. I couldn't stand a fraction of that. ANY commute option for you is going to suck; you made that lifestyle choice already. Lobby your local government to implement express inter-city bus routes or something. Or just move to a reasonable distance from your workplace.