I have used them many times, and have had some great experiences, but you have to be careful. The unofficial taxis don't have meters, and the drivers don't always know the city as reliably as the main services. Be ready to give directions and negotiate your rate!
Buses: While Kosovo doesn't have an infrastructure that supports national train services like many other countries in Europe, it makes up for it with buses. The bus system in Kosovo is pretty incredible and also super affordable. City buses run throughout the city and surrounding neighborhoods for 30 cents a ride, and they are generally very punctual. I haven't found a reason to take the city bus yet, but I have taken several buses to other cities in Kosovo, as well as to other countries in the region. Buses to Skopje, Macedonia (a city an hour and a half south of Prishtina), for example, run every 30 minutes between 5:00 a.m. and 9:00 p.m. and cost just five euros. The buses that operate within Prishtina are typical city buses, while the ones that travel from city to city are typically charter buses, or sometimes passenger vans.
Walking in Prishtina is wonderful. It's easy to navigate once you understand the lay of the land, incredibly safe and a great way to immerse yourself in the culture around you. Taking taxis and buses, at least at first, proved a bit more of a challenge. It's very rare that you'll find a taxi or bus driver who speaks English, so I've had many more successful rides since learning the language spoken here. Now that I'm comfortable with the way the systems work and have some basic vocabulary down, I actually enjoy the opportunity my rides provide to practice my language skills!