With regards to driving in the tourist areas (not Mexico City) it's safe and speed limits are sometimes respected. There may an occasional check point by the military (who's checking for drugs) but as a tourist, they won't put much of a eye on you (though it depends on which side of the bed they woke up) most of the time. It's fun and interesting and offers more flexibility for visiting nearby ruins and tourist areas (see a report in the previous thread).

car rentals - sorry don't know much but I've heard you should book in advance and through the internet and just call ahead to ensure your reservation is there. Booking directly over the phone with them in Mexico will be more expensive.