The picture on the left is of the small tram that goes from Lausanne to Ouchy, the village on the water. It also stops at the train station. The last photo on the page shows the tracks.
If you go to Lausanne on vacation, I think you should find the big church and climb up to the bell tower to get a really great view of the city. There are so many hills here that there aren't many other places to get a great view of the water, except you can see a thin area of the water from the Parc Mon Repose, or the "chill out" park.
Lausanne is not directly on the water, or near a mountain, so it doesn't have the vacation appeal of some of the other towns, but it turned out to be my favorite place in Switzerland. I'm not sure why. It seemed to have a San Francisco feel to it: More artistic and/or college centered. It's true that Montreux has the jazz festival, so I can't really explain it.
Here are two more things you get in Switzerland. McDonald's has "Choco Balls" and the restaurants have "Restauration Non Stop". I couldn't tell if this was a French or a British-English thing, but I guess it means there is much eating.