I live in a small city, and I drive a "normal" car. It's really not a choice for me -- we have no public transportation in my area. I only live 1.5 miles from the school where I teach, and I have considered riding a bike (in good weather only), but I'd have nowhere to keep it safe during the school day, and I just couldn't have it in my classroom, which is already small enough.
If we lived somewhere with a system like DC's Metro, we'd definitely use it and keep only one car for our family.
When my husband and I were first married, we only had one car. It was a HUGE budget-saver, and when we retire we'll definitely go back to that system. Right now it wouldn't work for us because he works "normal hours" in the big city down the road, and I work teachers' hours right here by the house -- it'd be too inconvenient for us.