To make buses work in a modern city, you need dedicated bus lanes. Mexico City has em, and they are amazing. Without bus lanes, buses suck for inner-city travel. They are slow, and traffic sucks.

But this is about connecting cities in densely populated regions, not transportation within cities: http://www.fra.dot.gov/downloads/Research/hsr_corridors_2009...

Buses between cities is a terrible way to travel. I know, I took buses from east/west coast repeatedly as a teenager.