The Japan Rail (JR) pass allows unlimited travel on any JR service in Japan. This includes most shinkansen (bullet trains), JR buses and JR ferries. This pass is available to foreign tourists and Japanese overseas residents. It must be pre-purchased outside of Japan and many travellers assume it would be convenient and good value.
If you’re tempted to buy a pass, consider this:
The cost of an adult seven day ‘ordinary’ pass will set you back ¥28300 ($290 AUD). A shinkansen with a reserved seat from Tokyo to Osaka is ¥13950 ($143) so if you’re doing a round trip, this would be close to paying off. BUT now that Jetstar can fly you into Narita Airport (Tokyo) and out of Kansai Airport (Osaka) or vice versa, you won’t need the return trip for your flight home. This leaves half the value of your pass largely unused.
So you need to make up $150 elsewhere. The JR pass is good for travelling between cities, not so much within cities. The JR pass is almost useless within Tokyo as you will use the underground subway. The JR pass is somewhat useful within Osaka. However, most trips within the city are only ¥100 to ¥300 ($1-3) anyway. If you want to go to Kyoto, the special rapid train will get you there for ¥540 ($5.50) in 28 minutes. If you want to go to Kōbe (for the famous steak), the special rapid will get you there for ¥390 ($4) in 25 minutes.
Also, central Osaka and the Kansai airport are both very well served by a subway system and other private train operators which can be cheaper and just as fast. I stubbornly spent 90 minutes in Osaka, changing trains four times just to use my JR pass when I should have bought a subway ticket which was much more direct.
Although there is the small convenience of not having to buy a ticket for every trip; if you’re going for a long trip with your JR pass, you’ll want to reserve a seat which means you’ll have to line up at the ticket office and book your seat anyway.
If you’re travelling within certain parts of Japan, there’re regional passes which are slightly cheaper but comes with more restrictions. You can also buy a 14-day pass or a 21-day pass at ¥45100 ($462) and ¥57700 ($590) respectively. Given that $590 bought me a return ticket to Bangkok last year; if you’re going to spend that kind of money, you should probably do more research to make sure it suits your needs.
Check out hyperdia.com/en/ to calculate the cost of each trip and japanrailpass.net/ for more information on the JR pass.
Lucille Wong 
Trains in Japan are easy to navigate once you get the hang of it. Especially metro lines. If you’re a confident traveller then I suggest you buy individual tickets rather than a JR pass.
We bought a three week JR Pass and were glad we did. Part of our travel included Golden Week and having the facility of pre-booking seats well ahead – we did this for several legs on commencement of the Pass validity period – saved us the risk of having to stand for several hours. I agree with the points you make about transport in cities such as Tokyo and Osaka; we did not use the Pass in these cities for the very reasons you cite, although you can get to some suburban destinations in Kyoto with the Pass. However, we did visit several cities in our four weeks in Japan and apart from using the Pass to get there, were also using it for day trip forays to sites from some of our destinations. The booking fee on the shinkansen is quite steep for one off purchases, but included in the cost of the JR Pass. And who can go to Japan and not do at least one shinkansen trip? I did the numbers recently on what it would have cost us to buy separate tickets on all the legs we did without the Pass, and the Pass came out well on top by tens of thousands of yen.