I would not rent a car in Malta (your impression about good bus service is spot on), but it's definitely useful in Gozo because it's much more rural and the bus frequencies leave a lot to be desired. You can rent one after you get to Gozo by the ferry docks. This will be especially helpful if you can only do Gozo as a day trip (I really regret not staying overnight - by the time we got there it was already 11am and that was the earliest because just getting to the ferry at the northernmost tip of the island took a long time by bus, and then there was the ferry crossing). I took the hop-on hop-off bus in Gozo and it was just way too much of a whirlwind trip...I got to see Gozo from the top of the bus but couldn't get off and on at more than two places, so a lot was missed. If I had a car (and especially if I allocated a few days to Gozo), I would have had a lot more flexibility. If you only have a few days (like less than 5), then I would stick to Malta because you don't have enough time to stay in two bases overnight. But that was my major regret - not allowing a few days of my trip to Gozo.
For what it's worth, I think staying in Valletta is much more preferable than Sliema...I say that because Valetta is truly the hub for all the buses that go everywhere around the island and you can easily spend a few days just in Valetta (many sites are concentrated there). If your trip is really short, I would consider this. It's not that bus service is bad or infrequent in Sliema, but it will take a bit more time because most trips are directly from Valetta. I found that section of Malta (meaning Sliema) to be really overdeveloped and without the charm that Valetta or the Three Cities across the bay have. I almost got a large apartment there but, in retrospect, am really glad I didn't take it.
