Does anyone know if it's better to rent a car to travel to other cities or buy a train ticket? which one is cheaper?

Depends on the city. IN Berlin, you do not need a car. Out of Berlin, you have excellent train connections to Potsdam, Schwerin, Dresden and many other places.

See www.bahn.de

yes, I went to the website and it looks like it would be the best choice. Is there a good time to buy the tickets or they're pretty much standard? thanks for your advice

Advance purchase tickets can save you a lot of money. Just be aware that there is no flexibility to make changes so be certain before you buy. Best fares go fast so if budget is important, buy them as soon as they become available.

Gotcha...one more thing, is bahn.de the only german train website? I wanted to book a day trip to Dresden from Berlin and the roundrip cost is 60 euro..is that considered a good price?

Ah, things get complicated. The 60€ are the normal fare with Deutsche Bahn. There are, however, a few connections via Vogtland Express (VX). VX cannot be booked via Deutsche Bahn (however the website displays the connections). You pay directly on the train and the fare is 9.75€ one way. Thus, the VX is usually the cheapest connection between Berlin and Dresden - but you have to change trains in Elsterwerda.

This is the website (I am afraid, in German only):
http://www.vogtlandbahn.de

thanks so much for your help, i'm going to visit website right now

If money is an issue, you can also check out the long-distance express bus between Berlin and Dresden. Fares start at €9 one-way.
http://www.berlinlinienbus.de/index.php?lang=en