I guess it depends where and when you plan on driving in the country. City driving is pretty crazy, but not really worse than Rome, for example. Driving from Guate to Xela is super winding and people drive really, really fast around those curves. Personally, I used Alamo bus for one ride from Guate to Xela, chicken buses for drives between one and two hours long, and some private and some public vans for travel in the Xela area and for a few one-hour drives. When I visited Tikal, I took flights between Guate and Flores, and private shuttles for the drives. I don't think I personally would rent a car in Guatemala just because I managed with the other transportation very well and wouldn't want the responsibility/hassle of keeping the car safe, figuring out parking, etc., even though those things in actuality might not be too big a deal. If you are going to be driving away from the major highways, you probably should consider getting a 4x4, especially if you plan to be there in rainy season from around April to October. I think I remember gas prices being pretty cheap when I was there a year ago, but I could be mis-remembering, as I only stopped at a gas station once.
Edited to add: As far as car safety, make sure you always park in a guarded or secure parking lot. Also, many locals have no fear about passing other cars on blind curves, so you should be on alert in case someone flies around a corner at you head-on. A large branch left in the road signals that there is an accident or a car broken down up ahead.
