I wanted to thank everyone who contributed to this topic. We landed a little bit late at Munich airport on the Saturday, but the driving conditions were good. We were upgraded to a Mercedes B class diesel, which drove like a charm! We got to our B&B in the south end of Salzburg in under 2 hours. Although the last hour of the drive was done in darkness, I had printed a good map and we got there directly. Our vignette costs 8.50 euros and we appreciated the suggestion of buying it from a gas station - it was very easy to do!
Since we had the car, on the Sunday, we drove to Wolfgangsee in the Salzkammergut. We went through St. Gilgen and Strobl, and spent almost the whole afternoon in the wonderful Christmas market in St. Wolfgang. We finished the day by heading to Eugendorf for a fun, fun, fun Krampus run!
One group delighted us with a bunch of Orcs and a Gollum - I was thrilled! The costumes were scary, the 60 or so Krampus were playful, and the local kids just cheeky in egging them on. Hats kept getting pulled over the eyes, coal smeared on older kids faces, some candies handed out to the cute littlest ones, and lots and lots of scary, in-your-face, interaction! I got thwacked a few times and squealed once or twice. There couldn't have been more than a few tourists there, as all we could see around us were local families.
We went into Salzburg by bus. There we visited the Christmas market, attended an advent concert and finished one evening at the Augustiner beerhall. We lucked into a very good German band from Leipzig playing English- and German-language classic rock'n'roll, in room #3. We never found out if it was a private event or not, as we were invited to sit with a group of German-speaking people when we poked our nose in. The extent of our conversation went like this: Canada = hockey = good, and signing along to the English covers! :-) :-) :-)
The drive back to Munich was over the mountain from Moosstrasse to Bad Reichenhall. We went up the oldest alpine arial tram and had lunch at the small Christmas market there. We then took a leisurely drive only as far as Reit im Winkl, before heading into Munich to drop off the car near Ostbanhof.
We were very happy with our decision to rent a car. Since Salzburg was a repeat visit, it afforded us the freedom and time-saving to do quite a bit more than if we had gone with our original plan of taking the train. We had a superb car, gas cost a total of about 40 euros, we got everywhere we wanted to get to easily and we had no issues with traffic or driving conditions.
So thanks again for all the great info, recommendations and suggestions!