There is a regular bus connection between Mandalay and Bagan (several buses a day). For the roughly 300km it takes about 8h - that says it all about the road condition. Additionally to the common exchange of bodyfluids with you seatneighbour, I was lucky to have a kid next to me, that got sick and had to throw up several times...the juicy bags where handed over me to the window and out....
Prices went up in Burma, if I remember correctly they charged me around 8 USD for the ride.
We paid USD75 for the journey to Bagan from Mandalay and a full day of touring in Bagan the day after we arrived.
It's cheaper to take the boat but this was more convenient. We were able to stop a couple of times on the way and we also did a little side trip to Mt. Popa. The driver took us to a few different hotels and we visited 15 pagodas the next day.
Make sure you negotiate the price in full before you go anywhere. We found that the price magically inflated once we arrived. It's sad that this happens but I guess they are just making a living.
I bought the bus ticket at the Winner Guest House. A pick-up from the Guest House to the Bus Station was included in the price.
This is a typical way of transportation. Plus there is always room for some more people, nobody gets ever rejected waiting along the road for a ride. Just squeeze into it ;-)