Greyhound coaches travel between Guelph and Toronto (http://www.greyhound.com/). Coach Canada coaches travel between Hamilton and Guelph (http://www.coachcanada.com/coachcanada/). Both offer travel between Guelph and other locations as well.
The city buses are quite efficient and run frequently (every 15 to 30 minutes depending on the route). They meet downtown at St. George's Square-there is no official bus station. It seems weird at first, but the location is convenient to do some quick shopping or other errands in between transfers (it can be done, believe me!).
The City of Guelph operates buses around the city. They're fairly convenient if you're looking for a cheap way to see the city or just get around town.
The coolest thing about the buses is that they all meet at St. George's Square (downtown) every 1/2 hour (at 15 and 45 minutes past the hour). So if you need to transfer it's extremely easy (and the bus drivers are nice...they'll call the other bus to make sure you get on if they are running late themselves).
Cost is $2 per trip or you can purchase a package of tickets for less per trip.