and if any vehicle comes within a certain distance of any other vehicle, the ID and location is printed on a screen.
How does that contribute to collision avoidance?
and was planning on using xbee pro 900 modems.
What range do you need?
What I am unsure of is what type of network to use
Your only two choices are point-to-point or mesh network. Obviously, point-to-point is out, because you have too many points.
You will need a coordinator - the center of the mesh. All other devices send data to the coordinator. It then sends data to all the other devices.
If the amount of data being sent is small, this might even work. This, of course, means that you need to minimize the data sent to the coordinator, and the amount of data sent to the router/end devices. That, then, means not sending ASCII data.