Inside the medina, you walk. Cars cannot enter, and the only other transport is the donkey trains that haul goods through the alleys (you will hear the cry of "Balak!" — "watch out!" — and you should step aside fast). For your first day, hire a guide; the medina is genuinely confusing and a good guide will take you to workshops and viewpoints you would never find. After that, just wander — when in doubt, walk downhill toward the river to find the centre, or uphill to find an exit.
Between the medina, Fes el-Jdid, and the Ville Nouvelle, take a petit taxi (red, metered, cheap — insist the meter is on). City buses run the same routes but are usually crowded.