I'm a N.O. escapee. I left one year after Katrina and have been back twice in the last 4 years. I still have a lot of friends there after living there 26 years.
It's a wonderful place for the architecture,food and indigenous music. There is nothing to compare N.O. to except European cities. The seafood is second to none except that I fear some contamination from the recent BP spill although that may not be scientifically founded. There are more restaurants now than there were pre-Katrina.
The politics have improved lately since Mitch Landrieu took over from the infamously sleazy Ray Nagin.
However, crime is really bad. The school situation is deplorable and the influence of crack cocaine has been profound. N.O. is the murder capital of the country and indeed is in the top ten worldwide. It's safe to be the tourist, but it's another thing to live there day to day with the threat of violence and crime pervasive. I had two home invasions and a armed mugging during my tenure there. I was featured on a TV station as "Fighting Back" during one of the home invasions. I'm not proud of that but at least I survived.
The differences in socioeconomic status are very visible and indeed divisive in N.O. Very wealthy folks live next door to very poor ones. Gangster types have proliferated with the growing popularity of hip hop. Guns pop out if you look at the wrong person the "wrong" way. Anger management is very poor.
Here's a recent hip-hop-powered example: Shorty Magnolia
and her "wonderful"
Mardi Gras is chaos. I love it for the years I marched with the Krewe of St Ann but I also hate the traffic snarls and trash. The last time I was there was for Mardi Gras in '07 and the experience was a bit too negative for me to want to go back any time soon. However, the classic side of Mardi Gras is quite nice as you can see from my picture scrapbook: http://kreweofsaintanne.org/mainmenu.html
I do plan on visiting but I will never live there again due to the crime and the threat of more hurricanes.
As I mentioned in another thread, I lost 15,000 vinyl records in the storm. That was quite a loss for me but mild compared to the loss of property and life that occurred on a major scale.
You can check my "recovery" website at http://vendomeplace.org