Basic Traffic Rules
There are some basic traffic rules in Japan that are different than those America. First of all you can not make a turn at a red light unless it is expressly permitted. That said red lights in general seem to mean less here than in America. It is not uncommon to see the light turn red then four or five cars go through it anyway. Also, since parking can be scarce people have a tendency to park in what seems like the middle of the lain while they go and run their errand. This is quite common and no one seems to notice much, but it can be really annoying.
There is a distinction made between 'parking' and 'stopping' here. Most roads do not allow 'parking' alongside them, but do allow 'stopping.' Stopping is defined as parking your car for less than five minutes for the purpose of loading and unloading, but in practice it means people park in what seems like the middle of the street. If you do park in a no parking zone, however, you are likely to get a ticket at the least, probably booted, and possibly towed.
Traffic Violations and Emergency Vehicles
One thing that can be unnerving is that police drive around with their lights flashing just to let drivers know they are there and to slow down. You do not have to give way to a police car just because its lights are flashing. You do have to give way when its siren is on, however, but this can be practically difficult at times. You are technically required to pull off to the left, but I tend to just make room where it is practical and let them figure out how to get around me. Police are rarely going anywhere in a hurry and you are much more likely to have to pull over for an ambulance.
If you should happen to get a parking violation it will usually be physically locked onto your car with a heavy plastic pouch and bike lock looking thingy (they usually attach it to the front grill). You then have to go to the local police station that issued the ticket, pay the fine, and have it removed. This can be a MAJOR pain if the timing doesn't work well with your schedule. The best advice is to not park where you shouldn't.
The other traffic violation that you could encounter is a speed trap. As far as I can tell Japanese police to not go out in a single patrol car and setup speed traps like they do in America. This is a coordinated effort involving a bunch of police and usually a roadblock. There will usually be an officer with a radar gun hiding (yes, hiding is allowed here) alongside the road somewhere that tags people then radios back to the other officers waiting further down the road at the roadblock. Those cars that were caught speeding are then waved over into a parking lot and are then generally processed on the spot in a bus for this purpose. I hear that sometimes if you don't speak Japanese they may not bother with the hassle involved in processing you, but don't count on it. The good news is I hear the police are generally polite and cutouts and after you go through the process and pay the fine you don't have to worry about it again (there is a point system on your license, but I wont go into that here).
Finally, if you are involved in an accident the there are several things you should do. First, you need to contact the police, fire, ambulance, etc. if it is a serious accident. They all have an English interpreter service and will be able to help you. If anyone is injured you should attempt to help them the best you can until the emergency services arrive. If the accident isn't that serious move the vehicles out of traffic then call the police and your insurance company. The insurance company may not have someone who can speak English on staff, however. If you have problems communicating call the Tokyo English Life Line or other assistance hotlines in Japan and someone will be able to provide phone interpreter services for you.
One thing to keep in mind is that the Japanese police rarely assign 100% of the blame for the accident to one person so you should not admit fault even though they will try to get you to do so. Typically, the damage settlements follow the police assessments of fault so if they determine driver A was 80% at fault and driver B was 20%, driver A will have to pay 80% of the damages.
Tips and Tricks
Many of the streets are very narrow, have no sidewalks (so people walk along the street), and have utility poles in inconvenient places (why? Unclear). That said everyone else in Japan has to deal with the same situation. If there is not enough room for two cars to get by one WILL give way to make room. Japanese drivers are generally very courteous and will make room for you. So just weave your way through the streets the best you can. Other cars will expect you to weave so it's not a problem (whereas in America no one would let another car use part of THEIR lane, pahhh).
Roads outside of cities are generally nice, well maintained, and wide enough to accommodate tour busses and trucks. Driving in the countryside is generally easy and relatively quick (but not as quick as the train).
You may have heard that roads in Japan don't have names and in general that is true. They do, however, often have numbers that are clearly marked. This number system consists of national roads, prefectural roads, and local roads and the sign-posts for these are color-coordinated throughout the country. National road signs are displayed on a red background, prefectural roads have a yellow background, and local roads are on a green background. Small residential streets are not usually named or numbered, however, so you will need a map.
The numbered roads make it easy to get around and know where you are. There are large signs before major intersections that clearly show which road is going where and are almost always written in Romaji (Roman characters) as well as Japanese. When you need to figure out where you are on a map you can easily look for the intersection where you are (ie. where route 16 crosses route 50). There are times, however, where the road you are on abruptly changes number or turns without much indication. There are also annoyincances like a sign saying the road number you want goes in three, four, or five directions. That's always fun. (Crap! Route 72 goes straight, left, AND right! Which way do I go? Quick, look at the map!)
National Highways are named just like train lines and usually have names based on the places they connect, but are annoyingly not usually numbered. The highways themselves are very nice and have an extremely high maintenance standard. Official speed limits are usually in the 80km/hr range, but traffic generally moves at more like 100-110km/hr outside of cities. This can make getting around Japan by car very easy and quick, but be prepared to pay for it. All highways in Japan have a toll that is around 100 yen per km. A trip from Tokyo to Kyoto ends up being about 12,000yen which is about the same cost as a one-way shinkansen ticket for one person (but more than one person can ride in a car!). Since the highways have controlled access they provide nice rest areas and service areas for gas, food, and such about every 10-20km (one of the reasons building/using highways is so expensive).
While the highways in Japan are very nice they are expensive and not nearly as quick as the train. Also, driving on the regular roads is about twice to three times slower than highways, but they are MUCH more interesting. These roads often snake through villages, pass scenic rice paddies, and you can discover hidden shrines using them (not to mention a never ending stream of neon-lit pachinko parlors).
One thing to keep in mind when driving around Japan is that roads are almost never straight or laid out in a grid. Roads tend to go in every which direction making navigation more of a challenge than in other places, but it's not at all impossible. You should obtain a good map of the area/s that you intend to drive in or just pick one up when you get there. These are essential for everyone, including Japanese people, and are thus sold in almost EVERY bookstore and convenience store in the country. Since all of the important roads are numbered and color-coordinated you don't need to worry at all about finding a map in English. The Japanese maps are also likely to list good information that an English map may not such as gas stations, convenience stores, shopping areas, shrines, temples, beaches, recommended restaurants, scenic areas, etc. They are also more likely to be precisely accurate, showing exactly how to get through the tangle, where tourist maps usually only give a general idea where the roads go.
The Mapple company produces some of the better Japanese maps. They have detailed maps of every inch of Japan and produce some great special interest map books. I especially like the motorcycle touring map books that they produce. The touring books list all of the scenic and recommended roads, local attractions, onsen, recommended restaurants, campsites, and anything else that would be of interest to someone touring around Japan on the roads. Some of our best experiences have come out of the recommendations in that book and you only need to be able to figure out a little Japanese to decode a wealth of information hiding in a map. While the most of the map is in Japanese, like a lot of other things in Japan, most of the major cities, train stations, roads, etc. are labeled in English.