Tunisia is compact and getting between cities is straightforward. The main options are trains, buses, and louages -- the last being a particularly Tunisian institution.
Louages are shared long-distance taxis, usually white Mercedes minivans with a red or blue stripe. They leave when full from dedicated louage stations in every town, and run fixed routes at fixed fares. They're faster than buses, cheaper than private taxis, and a genuine way to travel alongside ordinary Tunisians. On busy routes they depart constantly; on quieter routes you may wait half an hour for the van to fill up.
Trains are run by SNCFT (Societe Nationale des Chemins de Fer Tunisiens). The main line runs from Tunis south through Sousse, Sfax and down to Gabes, with branch lines to Nabeul and Bizerte. Trains are slow by European standards and delays are common, but they're cheap and comfortable enough for long hauls. First class is worth the small premium.
Buses (SNTRI for national routes, regional companies for shorter hops) cover most of the country. They're reliable and inexpensive, and often the only option for smaller towns not on the rail network. The main downside is that they're slower than louages.
Within Tunis, the Metro Leger -- a light rail network -- is the best way to get around the city. It runs on five lines and connects the city centre with suburbs and outlying districts. Tickets are cheap. Taxis in Tunis are metered and not expensive; make sure the meter is running or agree on a price before getting in.
Renting a car gives you real freedom, especially for reaching desert towns and archaeological sites that public transport doesn't serve well. Roads between major cities are in good condition. International driving licences are accepted.