All your transport needs will be dealt with by your tour company. Most of the time this means buses, although tour groups visiting remote sites eg. Paekdusan, Mount Chilbo occasionally use chartered flights by Air Koryo. Wandering around on your own is not allowed, and you are required to have a guide to escort you at all times.
A carefully stage-managed one-station ride on the P'yŏngyang metro (http://pyongyang-metro.com/) is included on the itinerary of most trips to Pyongyang, but use of any other form of local public transport is generally impossible.
If travelling in a small enough group it is also possible to organise a walk through some areas of Pyongyang with some travel agents Koryo.