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Public travel in Israel

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We are booked for a trip to Israel in May '13 and will arrive at 2:30 AM

1. Have heard the nesher/sherut is cheapest way to travel from airport to Jerusalem. Has anyone used one of these?

2. What is the "light rail or tram"? How does it work?

3. Plan to book tours and have researched several "cheaper" alternatives to the $650/day charged by most guides and agencies.
Has anyone used any of the following and would you share your experience with one of these "alternative" agencies- "Bein Harim Tours, Free tours at Jaffa Gate, Avinor,

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