Have just returned from Toronto and am a huge fan of their streetcar system. It's quaint, but reliable, fast and fun - everything mass transit should be. However, if Luas followed the Toronto model, I think the bodies would be piling up on the streets within hours.
I'm not sure how Luas will interact with other traffic, but the streetcars seem to rely on a combination of road manners and pedestrian cop-on, qualities in short supply on the streets of Dublin at the moment. In Toronto, where there are no mid-street stops, you have to hail the streetcars down from the side of the road, cross out into the traffic, which has to stop for you, and then repeat the process when you are leaving by the (automatic) back door.
There are small notices to be careful of oncoming traffic and motorists just have to exercise a little caution and consideration.
It works like a dream. Like the rest of the city.
I should add that Torontonians thing their traffic is hectic, but I think sounding the horn counts as road rage there...