In the comments of this Kuff post, Robert Nagle actually beats me to the punch in answering the central question. Yes, you can live quite comfortably in Houston without a car. As long as you base where you live as a function of that and are comfortable with all the other accoutrements of your daily routine being dictated by a mostly generous METRO bus schedule.
As suggested by Robert, I choose to live in an area where there are four different routes that intersect my neighborhood. Rush hour options for getting to work downtown have never been an issue for me. I generally have had the luxury of picking the one route that is a) closest to the start of the route to ensure good seating; and b) among the faster options for getting downtown. Since I've been stationed elsewhere for the recent political unpleasantness known as Election 2012, I'm limited to one and a half routes, with the "half" being the 402 Bellaire Quickline that drops off at Campaign HQ, but not at home. It's a half option for me if I choose to stop for breakfast in the AM or make a grocery run in the PM. I just basically transfer from another bus to the 402 in the morning or hop on the 402 to the store and take another bus from there to home (or just walk from the store).
Caveats are everywhere with this, of course. I basically walk half a mile to and from the bus stop. Right about this time of year, that's more than a little discomforting. And there are rain days that either make the situation modestly discomforting, brutal beyond despair, or worth calling in to inform the boss that my street is flooded. My local retail options are a mile away and I'm about as likely to walk that as I am to take another bus for it. Dining options are either a fairly expensive Pappa's BBQ within way-too-easy walking distance or cheaper fare in extended walking distance. Weekend runs to church have been either very or fairly bus-friendly regardless of which church I've attended in recent years. And making a big monthly run at the grocery store often has me breaking down to pay a few bucks in cab fare for some lucky cabby camped out in the Fiesta parking lot.
There are certainly a number of retail options that I generally don't have the luxury of. And the biggest adjustment is that I've found that I tend to think of time a bit differently than most of the others I've worked with. The concept of "running late" is not something I enjoy since, for me, it usually means a bigger lag in time than just the amount you're really running late for. A 5 minute delay at work means little if the bus only runs every 30 minutes and you just watched one go by, for instance. Since work is focused around rush hours for the most part, that usually impacts me for Saturday church - my Saturdays are practically set to a stopwatch for that reason. A laptop and the ability to tether at my convenience helps alleviate some of the mis-allocated downtime.
Probably the biggest gain I've gotten from relying on METRO has been that I'm allowed to make better use of my commute time - either catching a quick catnap before the daily grind, reading a book, or catching up on the news. When I drove everywhere for work, I definitely did not read a fraction of what I have the time for these days. To be sure, it's also a cheaper mode of transportation. And that's even after the faux fare increase that METRO slapped me with by doing away with the daily/weekly/monthly passes.
All of those kinds of tradeoffs certainly aren't going to be for a lot of people. But I don't think the decision of going with/without a car is really what's at issue. I'd posit that there are, however, a fair number of people who could probably stand to gain a little or a lot by switching some portion of their weekly schedule to include a bus run or two.