Having seen my mate's contract for Edinburgh Trams, I decided against pursuing my application further than the first stage. Not sure what sort of stories you've heard, but in my opinion you are definitely correct in saying that the contract was heavily weighted in favour of the employer. With 350 applicants for the initial 12 advertised Driver posts, they can afford to offer such terms & conditions... anything that will help them offset their huge budget over-run!
The main points were:
1) first 6 months are probationary.
2) they are managed by Lothian Buses, and you can be transferred to any other group employer or department - so if there are further delays in getting the trams up & running, you might find yourself working for Lothian Buses instead; My employer also operates trains but my contract doesn't mention anything like this so either it is a real possibility or they are just covering their backs.
3) no second (or third

) jobs without written consent. Again my current employer doesn't do this. As long as I stay legal within my domestic drivers hours.
4) average weekly hours are 40.
5) the company can change your hours/shifts with a weeks notice.
6) some nightshift.
7) salary is £20k in year 1, 22k in Year 2, and 24k in Year 3 onwards. Increases after 3 years will be looked at annually.
8) salary increases are subject to you meeting the company's competences though none of the new drivers know exactly what these actually are yet despite starting months ago.
9) overtime is flat-rate and with it being a single line network, don't expect much as the rotas will be easy to plan.
10) the Driver's contract contains an opt-out for the Working Time Regs which is probably them covering themselves as it doesn't look like you would really need it.
11) holidays - 33 days a year inc. public holidays.
12) if the tram network is closed down for any reason (like failure, maintenance, emergency work for example) they can take those days off your holiday entitlement - up to 8 days a year I think!!!
13) no pension mentioned but being run by Lothian Buses they might end up offering something similar to that or otherwise it might end up being the compulsory NEST pension scheme that the government is introducing. I'm guessing they might end up offering something similar to the Lothian Buses one. Might be along the lines of employee contributions from 3-5% which the company will match, but who knows?
14) sick-pay is government statutory which is £86.70 a week once you are absent 4+ days in a row. Poor but par for the course for most new starts in the industry these days.
15) training bond is £2400.
16) notice period (employer) is 1 weeks notice up to 2 years, then rising by a week for every year up to a max of 12 weeks.
17) notice period (you) is 1 week during training, 4 weeks during probation, and then 12 weeks.
18) union - the word from the guys already in the job is that they are looking to do the same as Lothian Buses and get Unite on board. No mentioned of the RMT.
(some are already Unite members from Lothian).
They were also recently advertising again for Driver and Controller jobs. I was sorely tempted to put in for a Controller job which was salaried at £27,795 but this was for a 45 hour week and included night-shifts. With the extra hours you have to do compared to a driver, you're only really getting an extra £795 and that's for the additional responsibility and having to work night-shifts so I regrettably decided to give it a miss.
In the end, I would say that most of the terms and conditions are the norm for the public transport industry (except train drivers) but there are some that stand out as being quite poor like them being able to take holidays off you if the network is down. You have to weigh up whether it works for you or not, but I felt that sticking with my current bus driving job was a better bet. You have to put up with some real **** sometimes but overall, my terms and conditions are slightly better, my pay (with overtime) is slightly better, I have a company pension, get full pay if off sick for a few days (I have been there a few years to build that up though), and if I do decide to jack it all in one day, I'm not on anything like a 12 week notice period.