Lived in a suburb of Birmingham (Hoover, south of the metro area) for 3+ years approximately 4 years ago.
Purchased housing generally runs $150,000 - $250,000+ for a three bedroom/two bath - less as one progresses away from the city, and more in certain areas (a great deal more costly in areas of Hoover, Vestavia, Homewood, etc).
Rentals are quite affordable. Had a 1,200 sqare foot two bedroom/two full bath with a sunroom and fireplace, full amenities (multiple tennis courts, racquetball, club house, several pools, etc) for roughly $700 per month.
Alabama, as mentioned, does have a state income tax, as well as a local income tax as well (in some areas). Property taxes are reasonable. Transportation costs are average. Utilities are slightly below average (recall $50 electric bills, and $8 gas bills). Sales tax varies by municipality, and ranged from 3% to 11% when last I looked.
May be somewhat a culture shock for someone from the North, but this is true of many relocations. By and large, the Birmingham area is good location - a bit of culture and history, relatively close to Atlanta (two hours, by car), etc. One note: if airline travel is important or a necessity, be forwarned Birmingham's airport is rather small-time, and chances are one will be making a short flight to a more major hub (Atlanta, etc) for a connection.
Good luck.
