My primary mode of travel in India has always been the Great Indian Railway.( and that too only 2nd class sleeper.) After coming to the US the only time I took the rail (long distance) was from St.Louis to Chicago. Low cost airlines are the defacto mode of travel over here for the common man.
Being a student I had to search and search quite a lot for getting good cheap flight deals.(However going to India justifies any and every cost.) I have managed to get some real good flight deals often. (Call it luck or my patience to wade through tons of deals to get the best one.)
While traveling as a student time was never a constraint and so flights at any time were fine with me. Also I have preferred to have flights with stopovers. I am quite tall and so sitting in a cramped position for any period of time is not my cup of coffee. (I don't drink tea.) Even if I do get a cheap flight with no stopovers while I am getting my boarding pass from the counter during checking in I try and ask the guys at the counter if they have anything with a stopover that I could change to.
Thanks to this stopover business I have seen quite a few airport lobbies and met several interesting people along the way too. There will always be the couple out to spend a special weekend together, an entire family, business executives on their blackberrys, the hottest chick on that flight( that everyone will be hoping to has the immediate next seat to them), the lost people (in their own thoughts), fanatical sports fans (I had a conversation for quite a while with a Cardinals fan when he saw that I was from St.Louis.) and other assorted characters. On international flights however I am a lot more interested in the airport lobby than my fellow travelers.(Duty free stuff anyone.) Also you get to sample local fares from that country at these international stopovers.
Low cost airlines are the big rage in India too now. (Air Deccan, Spicejet, Indigo etc.) There is nothing that can beat the Indian Rail network though. Even though there are these cheap airlines but still the common man who may have a stopover at Bhusaval while going from Mumbai - Nagpur will take the rail. The low cost model has done well in the US mainly due to the less coverage of its rail network and also due to the huge number of airports. NYC for instance is serviced by JFK, Newark International and La Guardia. (Dallas also has two airports ,DFW and Lovefield.)
IMHO until adequate infrastructure comes up it will take quite some time for low cost airlines to take off in India and become the main mode of transport like they are in the US.