If you’re going to Japan and are planning to see more than just Tokyo or Kyoto, you should definitely get a Japan Rail Pass. It allows you to take any JR train – which includes the Shinkansen and even some overland buses – with a minimum amount of hassle within a specified time period for a lump sum payment upfront.
Note that a Japan Rail Pass is available only for people who enter Japan on a tourist visa and can only be bought abroad. It is not available for sale in Japan.
The procedure to get one is as follows: Go to the Japan Rail Pass site and find a local travel agency that sells exchange orders. You pay upfront for your exchange order – depending on whether you need one for adults/children, for ordinary travel or green cars (those are first class) and on the amount of days you want to travel (7, 14, or 21) – and after your payment has been received, you will get the exchange order for your rail pass.
Once you have landed in Japan, you can go to a JR ticket counter (the one at the airport is best, imo) and get the real pass for your exchange order. You need to show your tourist visa and can indicate the starting day of your Rail Pass.
From there, it’s travelling bliss… All you need to do is to go to a manned ticket gate (the pass won’t fit through the normal slots of the machines), show the pass and go through. Sometimes there are different gates for going in and out the paid zone, but unless you come at a very busy time, the staff will be friendly about it. If you travel by high speed Shinkansen, it’s better to reserve a seat – just go to a ticket counter, show the pass and get a reservation, they are always free!
When I go to Japan this time, I will not get a Rail Pass, as I am not planning to travel, but I did buy one for 21 days last year. It was rather expensive (the exchange rates were bad), but as I was travelling up and down Honshu, it was worth it nonetheless. Enjoy!
Here is the Japan Rail Pass homepage with all info you may need.