The roads on Curacao are generally reasonable, although the differences are large. Some roads are excellent, but on the other hand there are still many roads with holes or unpaved roads. You can expect everything. Fortunately, in recent years the government is improving the major roads.
The local way of driving is 'relaxed' but also something unpredictable compared with the USA or Europe. A careful way of driving is the best. With a normal car you can get to all the tourist places. You will not need a 4WD for that.
In the rainy season (October-January), some roads have closures, which include some unpaved roads in the west. Driving can be busy in the main town (Willemstad), but is very quiet outside town.
It is striking that, in line of the whole lifestyle on the island, the traffic goes very relaxed. It is something you have to get used to if you're used to drive in more busy areas, but it is simply a matter of "sit back and relax". It is your vacation, anyway?
Traffic rules are roughly the same as in North America and Europe: they drive at the right side of the road. However, there are a few exceptions: through traffic always has priority to other traffic and on roads with two lanes, you may overtake left and right. And turning right at a red traffic light is not permitted.
And the major difference: people are very polite in traffic and you'll often can have way where you do not have it. That's very enjoyable but also needs you to watch what is happening in front of you.
At an accident or damage, you usually do not call for assistance to the police but to the Curacao Road Service (CRS). They make an extensive report of the accident or the injury; they do it fast and very modern, using modern Internet technology, sent directly to the insurance companies. But, CRS does something more: they mostly make decisions who is guilty of the accident, right on the spot. That makes it a very efficient settlement of a collision. But to do this in the right way (according to Curacao Law), there are a few rules you have to know 'just in case' that we will explain at the delivery of your rental car.