It didn't suck as a solution when it was implemented. The buses function like small diesel trains; they don't have to deal with traffic, and can travel faster because they kinda lock in to the rails. It didn't need as much land as a freeway or cost as much as a dedicated train line because you could just retrofit old buses. Plus the advantage of being able to run a standard bus route at each end of the line, no need for connecting services.

Pretty much. This is the O-Bahn in Adelaide. More info (and the original picture I shamelessly ganked) here: Wikipedia link

Holy shit, I didn't know that. I always thought the O-Bahn was a unique piece of Adelaide weirdness. Adelaide has a lot of weirdness.