Buses and busy city streets

The following article is about a plan to create a fully-separated busway on 34th Street in New York:
http://www.streetsblog.org/2010/03/02/dot-plans-to-bring-nycs-first-separated-busway-to-34th-street/



We really need to do more of these in Melbourne too! Every time I work on a planning study for a freeway, I hear people saying that we should be investing in public transport instead. However, there's no reason why you can't use roads for public transport, and building one form of infrastructure and using it for all forms of transport (public, individual, freight and commercial) is the most efficient use of public funds.
Imagine something like this on Punt Road/Hoddle Street, Johnston Street and so on ... it would make both traffic and buses move much faster. The New York DoT is predicting that bus speeds will improve by 35%, which will reduce travel time significantly.
At present in Melbourne we are just too tentative about bus lanes. The ones on Springvale Road, for example, appear and disappear all the time, and are ignored more often than they are honoured. The buses are still stopping in traffic much of the time, because many of the bus stops have still not been indented from the road.
I used buses all the time when I was in New York - they were a great way to get around. It was easy to see where they were going and you could watch the city as you were passing by. Buses are clearly a major form of public transport in New York, covering areas where the subway system doesn't go.