Brazil is so large, that getting between the larger cities requires getting on an aeroplane and flying. Thankfully, Varig, the national carrier has a fairly comprehensive network and this is supplemented by some smaller local airlines that cover other routes. Unless you plan to stay only in one place, then an air-pass is a vital investment and can be booked in advance of travel.
To save money, you can get buses around the country, although these are crowded, and journeys on some routes can take days rather than hours.
The Amazon River that bisects the country has many ferry services that operate along it and connect many places and it is possible (although costly) to get on a boat close to the East coast in Iquitos Peru, and sail right through to the Atlantic. This is a good way to spend time, and see the jungle, meet the locals and get a sense for how the people of Brazil's dark heart live.
Though the roads in Brazil are generally of a good standard, the driving you experience on them is nothing short of suicidal. Taking a freeform approach to driving that is more jazz than classical, they drive on whichever side of the road they prefer, drive at whatever speed they feel comfortable with, and consider driving aids like headlights to be a waste of time. While you may want to rent a car in Brazil, and no-one can stop you if you do, you'll probably bring it back a day or so later shaking and terrified, unwilling to get in one ever again.
