It has been a few years since I was there during the film festival, but I have been there during BlueGrass in the recent past. Generally, there are a large number of people, but not more than the town can handle. You should be able to find a place to eat without too long of a line and the more popular places will accept reservations. Whether or not it is absolutely maddening will depend on your tempermant and expectations. Relax, expect a good number of people and enjoy the scenery if you happen to have to wait. I found that everyone was friendly and willing to visit while waiting. It made the time pass quickly. Traffic will not be an issue. You park your car and walk. I think you will have a great time and September is a wonderful time of year to be in town.

While film festival does bring a sizable crown to Telluride it is not even in the same league as Bluegrass as far as crowds go. If you plan ahead you won't have a problem getting reservations etc... Also the hiking is great that time of year.