It is worth noting that it is already Greens policy to increase the number of buses between these towns (especially Ballarat and Geelong) and that this should go ahead either independent of, or previous to, reintroducing passenger rail. Which to me seems the way to go - I think that by the time the political wheels turn, a service between Geelong and Ballarat will be justified, and buses are both a good way to prove this and a good stopgap measure. The Ballarat-Bendigo leg, not so much - buses are all we need for the foreseeable future.
As to the question of whether buses would continue after trains were reintroduced - neither the Greens nor the Regional Rail Alliance has said anything on this subject, as far as I'm aware, but I would like to see a small number of buses that would continue to run in between trains, both to supplement the trains and to continue a basic service for the towns too small to justify rail - roughly like what happens between Ballarat and Ararat.
The Rail Revival Alliance Facebook page attracts a lot of nutters, but by being way off to that extreme, they pull the moderates in their general direction, which to me is a good thing, because some parts of the project do have merit. Similarly, the Greens might not win government any time soon and that does tend to make them over-ambitious in their projects (since they won't have to pay for them) but they do have the effect of influencing Labor and the Libs, who don't want to lose votes from them, and who have to deal with them in the Upper House. Such is politics.
Anyway, I've blogged some more detailed thoughts on the project at large here
and the Greens' proposal specifically here
if anyone's interested.