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Bus N19 is very frequent, clean and not crowded. One way ticket is 30dh. Petit taxi to medina shouldn't be more than 30dh as well.
To get into town from the train station or the airport, there are several bus lines as well as petit taxis that will take you into either the medina (old town) or the modern tourist areas. Petit taxi drivers are particularly abundant, but make sure to settle the price of any ride before getting in, as sometimes the drivers will ramp up the prices for wealthy-looking foreigners.
Once inside the medina, travel by foot is a good way to go, even though seeing all the major attractions will require a good deal of walking. Again, buses or taxis are options. Almost all the bus lines in the city stop at Jemaa El Fna, the central square, and Place Yossef Ben Tachfine.
In Marrakech, you will also find about 300 caleches, or small horse-drawn carriages. These provide a good way of seeing the city en route, and can be found most easily at the Square de Foucauld near the Djemma El Fna. Again, it is a good idea to ask about the price of the ride beforehand.
A more formal City Sightseeing Bus is available as well from the Square de Foucauld. It travels around the outskirts of town and provides commentaries in eight different languages. Tickets, once purchased, are valid for 24 hours, regardless of the number of times you choose to get on or off. The buses do stop running fairly early, though, so take the tours in the morning rather than afternoon if possible.
Hiring bicycles if you are staying in a Riad in the Medina is totally the way to go - it makes getting around so much easier - get a hat, get a bike and you can travel around easily even in the hotter parts of the day when its quieter. Negotiating the souks by bicycle is very good fun too - how far can you go before you have to put your feet on the ground, staying balanced at a standstill and getting rounds of applause for avoidance manoeuvres!