So where is the flight tie-in since this is a travel blog?
OK There is no direct connection! But, with the first 4 seats on each coach costing a mere $1 each (there are 56 seats total on each bus), a fairly quick ride south dropping you off near downtown L.A and 3 X daily service - including a "red eye" bus ride (leave 1130pm arrive L.A 6am), it's certainly worth considering over a flight to LAX.
What about Greyhound? (oh yea...Greyhound)
They're still around, and with a well established infrastructure of schedules and routes, it would seem Megabus is driving against some stiff competition. Megabus asserts however that their low price, tiered pricing structure (tickets never cost more than $36 each way) and non-stop service make them a superior product.
What I see absent from their press release is how coach service will meet a need for travelers. In the U.S at least, shady stories are ever present as it relates to Greyhound, not the least bit because of where the bus stations are located. A marketing campaign to drive people onto the buses because of a superior product such as service, onboard movies/entertainment or buy-on-board food is needed. The company should also remove itself from the present image of a dark, seedy Greyhound Bus Station by emphasizing where bus drop off points are located (ie: Cal-Train Station in the exciting SOMA, or near Dodger Stadium in L.A).
Still, Megabus is an option people have as an alternative to air travel, at least to Los Angeles for now. While I doubt business travelers are lining up to purchase, small groups of friends may find some fun riding the bus down to L.A for the weekend. Megabus
Source: Megabus Press Release