Following my previous partly-informed comments about urban development in Christchurch, I'll add some thoughts on the place where I actually live.
Many of the discussions of transport and urban planning in Wellington seem to divide along broad ideological lines. On the one hand are those who have an "all cars all of the time" mentality and want to build as many motorways, flyovers, tunnels and bypasses as it will take, with those not travelling in cars little more than an afterthought. On the other hand are those who would like to see a complete alternative infrastructure, often emphasizing light rail (I'm not sure what the deal is with light rail -- for me, it hardly grabs the imagination like, say, fast inter-city trains or a metro system).
I don't mean to go all Matthew Yglesias here, but there are some technical improvements that don't require commitment to any one vision of the world.A simple thing that would clearly improve central Wellington would be some kind of bridge or underpass across the northern end of Waterloo/Customouse/Jervois Quay, preferably at Whitmore St opposite the Lynx ferry terminal. Wellington has an impressive waterfront, a mostly public space with good recreational opportunities. It is well linked to the central city at the Courtenay Place / Cuba St end by the City to Sea bridge. However, Wellington's CBD also has a centre of gravity at its northern end, which is home to the government sector, the railiway station and the stadium. This connection of this area with the waterfront is severed by four lanes of traffic roaring along Waterloo Quay. To cross to the waterfront, one has to wait for the lights or a break in the traffic, which sometimes takes several minutes.
I mostly notice this as an annoyance when going for runs, which tend to start from a base in the northern end of the city. But it's also a clear flaw in what is otherwise, by New Zealand standards, a relatively pedestrian-friendly urban layout. Wellington's city centre is mostly well connected to the hills and water to its south, east and west. The northern CBD-waterfront gap is one of the kinks in this flow. Another, of course, is the ugly bottleneck at the Basin Reserve.