I'm torn between renting a car for three days or just taking buses and taxis. Any advice would be appreciated. The place we're staying on Paradise Island does offer free parking.

It depends on what you want to do. If you want to explore all over, then rent a car. If you just want to go into downtown Nassau a couple times, that's easy enough to do with taxis. We have also used buses there.

I would not rent a car in Nassau unless I really had to. If you feel you need one for a day to explore the island, then you can rent one on-site for a day, but I've never rented there. Tours are frequent and pretty reasonably priced, and you can easily get a taxi or water taxi if you want to go into Nassau from Paradise Island. I've never used the buses, but I've never found New Providence the kind of island I wanted to just drive around. Grand Bahama, however, is a different story since it has so many things off the beaten path.