Ironically, they require Americans to take the practical test because all 50 states have different laws, but it seems that license testing situations (albeit not the actual laws) vary widely by prefecture.
In my prefecture most people have reported having a pretty easy time passing. We had to drive around an empty course and pretend the lanes were a lot wider than they were (when they say "move over to the right side of the lane" it means move over 3 inches). The most hairy part was navigating some tight S and Z curves (tapping the curb is automatic failure) which weren't even that bad. The testing guys explained the course in redundant detail and gave us a copy of the map to take home and study after the initial paperwork was done.
The written test is simple, but it's in horrible English, so if you can read the Japanese on it, that's a leg up.
Remember to bring your passport and American license to the center. They copied every page of my passport and asked me questions about everywhere I've gone in the last 10 years.
I'm fairly certain that the deal with international driving permits is the following:
You can drive with an IDP for up to one year following your entry into Japan (or until the expiration date, whichever is sooner). The only way to start using another IDP is to leave Japan for more than 3 months and come back. So this means that if you will be in Japan for more than a year, and won't be leaving for 3 months or more at a time, you must convert your license sometime within the first year. I converted mine about 11 months after I got here. You might want to get the ball rolling about 2 months in advance because the process is a bit tedious.
One last thing:
You must have had a valid license in the US for at least 3 months (and spent 3 months in the US since getting your license) to be eligible to convert your license to a Japanese one, and if you have been in the US for less than a year since you got your license (or got your license less than a year ago), you have to drive around with one of these learner's magnets on the front and back of your car
for one year following your license conversion.