re: fare evading...i got inspected all the time while in europe. i always had my ticket with me (well, except for one time when i left it at the hostel, oops) so it wasn't an issue, but i knew a group of people travelling to switzerland (from a tiny town in bavaria) and got caught. they got dumped at some train station in the middle of nowhere and had to pay fines...i think in germany it's like €300 or something crazy. long-distance travelling like that is obviously more prone to inspection i know, if you're catching a regional train the conductor has much more time to go through and check everyone's ticket.
it did happen even on just local trams and such, just much less frequently. never got checked on a bus (i had a pass, so i didn't walk up to the driver and show anything/pay for a ticket).
here in memphis though? any time i've ridden the trolley (or what you all would call a tram), i've never been checked. it's just one guy driving it, it'd be a pain for him to get up at every stop and check tickets. never ridden the buses here so i can't say what they do.
re: trams stopping in the middle of the street...it is definitely a little odd at first. the trams here in memphis sorta do it, as they drive in the left lane. but the main trolley line is almost entirely in a pedestrian-only area, the rest of the line doesn't see a lot of car traffic, at least not to the point where it's impossible to cross. plus this street is just one lane per direction, so you're not far from the kerb. the other line though where it is two lanes per side, there's actual stations in the median area, so you're not just dumped in a little strip of pavement in the middle of the road.
luckily it seemed whenever i did take a tram in europe, the stop was either busy enough in that there were plenty of other people crossing too, or it was dead enough that i didn't have any traffic to deal with.