Take Train or Drive from San Sebastian --> Barcelona --> Sarlat-le-Caneda, France ??

Why not start in Barcelona? Barcelona-San Sebastian-Sarlat makes more sense to me.

*How aggressive is the driving in Spain and France? Are there different traffic laws we should be aware of?

My experience with Spanish roads is that it can be a bit aggressive and locals tend not always stick to the rules. And yes, there are different laws in Spain and France.

*Are there narrow, windy roads between San Sebastian and Barcelona or between Barcelona and Sarlat? I don't do well on those kinds of roads

Windy? Yes. Narrow, mostly not but there are exceptions: https://goo.gl/maps/Nye4xWwzTHeM9md57

*We would be dropping the car in a different country than we started in. What kind of fees should we expect?

If you stick to the car rental plan, take the train to Toulouse and rent the car there. That is a good way to avoid all the hassle of a cross border one way car rental.

I have just tried a dummy booking for one day from Barcelona - instead of returning the car to Barcelona, dropping it near Sarlat adds about €900. I presume that this fee makes it impractical - it would for me!

You need different International Driving Permit for France and Spain. You need to be aware of the road rules in both countries and various speed limits.

Most of the drive from San Sebastián to Barcelona can be driven on autovias/interstates. Where you’ll run into windy roads is in the mountains and you’re not on an autovia. Once off the autovias, most roads are a full two lanes wide. Very seldom does one come across a narrow road like some of those in rural Wales or Ireland. I don’t find driving in Spain to be very stressful unless I’m in a larger city I haven’t been in before, and in rural areas drivers are not very aggressive at all. Many drive like they’re on a Sunday afternoon outing. The traffic laws in Spain are pretty much the same as in the states. There are a few different road signs, and stay at or below the speed limit to avoid the speed cameras. It’s been years since I’ve driven in the part of France you’ll be visiting, but I recall the driving to be much the same as Spain.

Thank you for all of this! I think with the car rental fees perhaps we just take the train the whole way. We'll have a very long day from Barcelona to Sarlat but I think it will be less stressful than driving. Given our itinerary will be San Sebastian, Barcelona, Sarlat and then Paris - I wonder if a eurail pass is worth it? I am using Rick Steve's Rail Europe site to look into train times. For the trip from Barcelona to Sarlat - it is three different transfers. Is it safe to assume that we catch the next train or bus in the same place as where we get off even if they are different carriers? I can't tell one way or the other from the website.

Barcelona to Sarlat can be done with 2 connections, at Narbonne and Bordeaux. Is that what you meant? (If you were able to depart from San Sebastian, instead, it would be faster, but still 2 changes of train.) Looking Up Train Schedules and Routes Online gives you the Deutsche Bahn train schedule link and tips for using it. It's not selling train tickets for this area, but that may actually contribute to it being the better resource for train schedules.

The Eurail Global Pass this year starts at minimum 4 days of travel within a month for about $275 per person, no longer 3 days, with extra seat reservation fees on each leg you mentioned. Would you have any use for the fourth day? You can easily spend that much to buy the train tickets for these long distances. But you can probably book them ahead for less. Look at rates when those dates open for sale, usually 6 months ahead for France and 3 months for Spain, but most French summer tickets go on sale in a big block, rather than rolling out one day at a time.

Are you already decided that you'll use local tours or taxis for any excursion outside of Sarlat?

P.S. You don't want to assume the connection station will be the same, though they usually are and train schedule results should state the stations. It's quite clear on DB if it wasn't so far. (Cities where you often have to change actual stations include Paris, London, Birmingham, and Istanbul, for instance.) San Sebastian has two central stations, for two different railway systems - the national Renfe (with runs to Barcelona) and the regional Euskotren (providing most service to the French border).

Why not mix train and car? I would definitely have a car in Sarlat and surrounding area, and even getting there. You can take the train from SS to BCN, and then from BCN to a major train station in France, where you can rent a car for the Dordogne time, then return the car at a train station and take the train into Paris. Of course you could reverse the order and start in BCN, train to SS, take a bus over the border, rent a car and drive the Sarlat, etc. We did something similar, and I was glad to have the car in Sarlat. There is so much to do and see around Sarlat that is inaccessible without a car.
We have driven throughout France and Spain and find it not difficult at all! We've driven on major thoroughfares and twisting two lane roads. The driving around Sarlat is stunningly beautiful. Very bucolic. The road between San Sebastian and Barcelona is mostly major highway! Ive never experienced anything driving in Europe that I haven't experienced driving in the US

I agree with the idea of taking the train to a border town, then renting in France. I have driven in France several times and found it quite easy. (And do get an international DL from AAA). We rented most recently through the broker, AutoEurope and liked their comparison features and helpful website. They offer good advice and are available throughout your trip via phone and email. We have also booked directly through Hertz with no issues. And I think having a car in Sarlat is very helpful - public transportation is limited in the Dordogne.