SUMO - Simulation of Urban MObility
Simulation of Urban MObility (SUMO) is an open source, highly portable, microscopic road traffic simulation package designed to handle large road networks. It is developed by employees of the Centre for Applied Informatics (ZAIK) and the Institute of Transport Research at the German Aerospace Centre.
Read the User Manual at the documentation section. There are also some useful developer links, a wiki and other examples. The instructions for installing the application are also here.