I've been to Vegas 3 times in the last year, Aug 07, Jan 08 & July 08. The first trip we did not rent and should have, the 2nd & 3rd time we rented a vehicle. I love the convience of having a vehicle, and it's free to park at any hotel. I priced out what taxi's would cost and it ended up cheaper to rent a vehicle. We like to do lots of shopping so going to both outlets, plus the mall, a trip to Freemont Street and a rental is covered. If you plan on staying mid-strip and only doing things within walking distance then you are OK. I found it easy to drive in Vegas actually, no worse than rush hour traffic at home.
It really depends what you want to do and see. Always rent from the airport as its cheaper. I rented an SUV for the last trip, $19/DAY.