cashiers check, check, cash, or even paypal will work.

Just be sure the seller signs the back of the car title before he the new owner takes delivery.

A bill of sale is usually just to prevent from later arguements arising about how much the car was and if each person paid/recieved the correct amount. If you know who you're dealing with, you might not need one. Just a verbal agreement on a price is all that is required...however, to protect your own ass, it is best that you do write up a simple bill of sale just so that the buyer doesn't come back later saying he didn't agree to pay that much, etc.