Transportation networks follow up

As a follow-up to my earlier post on transportation networks, here is a recent article from the NYT (http://www.nytimes.com/2009/03/04/us/04states.html?_r=1) that talks more about how most of the stimulus money will be invested in repairing the outdated US infrastructure instead of building new roads.
But I’m still curious as to how transportation projects are planned. How is a needs assessment conducted when planning the construction of a highway?