Berlin is a fairly big city, so going on foot only is not advisable. In spite of the size of the city, the traffic is not to heavy, also due to the fact that the streets tend to be wide and the traffic is very well organized.
Public Transportation
The system of public transport in Berlin comprises underground, buses, trams and local trains. It takes you anywhere at almost any time of day, but it is somewhat more expensive than in other European cities.
Bicycle
Berlin is a bike-friendly city. There are plenty of bike-only lanes both on streets and side walks. In fact, since bikes go very fast in Berlin, the risk of being run over by a bike is not that remote if you carelessly cross the bike lane on a sidewalk. Bikes can be rented, and the city is full of bike stands where you can safely chain your bike and go on on foot.
Car
Given the fact that the traffic is not intolerable, renting a car is a good option, especially in the summertime. It is not to difficult to find parking places (if you're not trying to go to the Ku'Damm on a Saturday afternoon), and it is fairly easy to learn the main routes to reach each of the various Districts.