We have been working very hard to try to understand which will be the best option for travelling in Austria, Bavaria and Switzerland. We are planning to use public transportation for most of the site-seeing trips as well as moving between the 3 countries. Would it be best to use the specific country rail pass or get the EuroRail Pass. It appears that some of the rail passes also include local trains, buses and attractions. Thanks for any help and suggestions.
It's typically best to buy point to point tickets, and not even bother with rail passes at all. Rail Passes are usually way overpriced and not worth the expense. Look up pricing for those on the country's rail websites: Germany = bahn.de, Switzerland = sbb.ch, Austria = oebb.at -- and schedules look like for your planned travel. Www.seat61.com is a good resource to learn about train travel throughout Europe in general. While these rail passes do provide discounts on attractions and other transportation sometimes, that means you have to use a day of your pass (so you probably would have to buy a pass with even more days then).
To best advise you it would be helpful to have your itinerary.
Rail passes are best if you want the flexibility to "wing it" and make last minute destination plans and you don't mind paying for it. Even then it will depend on the number of long distance trains you may need. Last minute tickets at the train station are generally quite a bit higher than tickets purchased say 2 months in advance. If you qualify for a student pass it might work - depends on your ages. Your best bet is to check the rates both advance & last minute for your desired routes and compare those totals to the various passes. It does take doing a little research to make an informed decision.
To many travelers, a Eurail pass is the easy way out. The alternative, and usually a much lower costs, takes a bit of homework on the different country train websites and studying the train schedules to check out the value and advantage of point-to-point tickets. Many countries have 40%-60% discounts on their tickets if you buy in advance. These tickets are non-refundable but if you plan well and know your travel dates, these tickets can really lower your costs. You can buy them directly from the three websites described above.
Secondly, note that the pass generally covers the slower local regional trains. Many countries charge a supplemental fee to ride their nicer fast trains. Austria, Germany and Switzerland are three countries that are a bit more forgiving in that you can ride most of their trains with the pass. In Switzerland, the pass does not work on any of the buses. Also in Switzerland, if you intend to visit the Lauterbrunnen Valley, your railpass only provides a 25% deduction from the full fare on the local trains there beyond Interlaken Ost. It does not cover the full fare in this entire area. Depending on how long you will be in Switzerland and the parts of Switzerland you intend to see, a Swiss pass or card could be very useful.