Hi there,
Buses are great and run fairly regularly on Sao Miguel. I rented a car on Terceira as some of the places I wanted to visit were a bit remote. Depending on where you're going the bus service is fairly regular and it is the only island with an airport bus. Although there were only two or three buses a day on Pico and Sao Jorge I managed okay with the buses and some taxis (very cheap). I used taxis and walked on Faial. While walking, I generally took an early bus to my furthest point and then walked back.
I loved travelling round the islands. Costs are very reasonable and if you have a tent the campgrounds often have a cafe attached. Fish dinners were a bargain!
David
