In recent years, tremendous progress has been made in understanding the dynamics of vehicle traffic flow and traffic congestion by interpreting traffic as a multi-particle system. This helps to explain the onset and persistence of many undesired phenomena, e.g., traffic jams. It also reflects the apparent helplessness of drivers in traffic, who feel like passive particles that are pushed around by exterior forces; one of the crucial aspects is the inability to communicate and coordinate with other traffic participants. We present distributed methods for solving these fundamental problems, employing modern wireless, ad-hoc, multi-hop networks. The underlying idea is to use these capabilities as the basis for self-organizing methods for coordinating data collection and processing, recognizing traffic phenomena, and changing their structure by coordinated behavior. The overall objective is a multi-level approach that reaches from protocols for local wireless communication, data dissemination, pattern recognition, over hierarchical structuring and coordinated behavior, all the way to large-scale traffic regulation. In this article we describe three types of results: (i) self-organizing and distributed methods for maintaining and collecting data (using our concept of Hovering Data Clouds); (ii) adaptive data dissemination for traffic information systems; (iii) methods for self-recognition of traffic jams. We conclude by describing higher-level aspects of our work.