Originally Posted by
Bob'sYourUncle
Yes, by law you're required to carry ID at all times. For non-EU nationals, the only acceptable form of ID is a passport. In general, the perception in Europe is that driver's licenses attest to the ability of an individual to drive a motorized vehicle, and not to the individual's identity. It's uncommon to use the license as ID, and officials potentially asking for an ID will most likely be a little confused.
In practice however, you will not ever need to show ID unless you're involved in some sort of incident, and in such a case I would say you'd be fine with a photocopy of your passport. Contrary to popular belief, the police are reasonable and common-sensical, so as long as you say 'here's a copy, the original is at the hotel for safekeeping', you should be fine. It's not like in the US where you have to show ID even for simple things.
Just to drive the message home: In the past twenty years of living as an adult in Germany I was IDed exactly ONCE by the police, and this was when there was a break out at a prison and they stopped everybody. The only other place apart from the borders where one has to identify oneself is usually when checking in at hotels.