We were there about 4 weeks ago - week at Kruger National Park, and a week near Cape Town. We had hire cars for the whole time, and I would say they are essential. I don't know how we would have managed without. They drive on the left, and the roads are much easier to drive on than ours (in the UK I mean). Roads are good, and navigation is easy. Other drivers are extremely courteous, and the standard of driving much better than the UK. Seems perfectly safe, although as with anywhere you need to be sensible. I am fairly sure there are areas you should avoid, and I think driving in the cities at night would require some forward planning. I didn't do it, and to be honest, I can't really see why you would want to!
Do plan your journeys carefully, and remember that it is a very large country.
By the way, everything is very cheap - most things are extremely good value. After a few days we stopped thinking about the prices. Our most expensive meal was less than �30 for two - and that was a very extrvagant Sushi meal.
Hope you enjoy it - we certainly did.