I've spent four years as an undergrad in Fayetteville and I think it's a nice place to live and study. It's a small-ish college town in the mid-south with a big-time college sports program, which makes for an interesting combination of "vibes". Football is HUGE around here. Games are on Saturdays in the Fall semester, so be prepared for an extra influx of traffic and people. The football stadium holds over 70,000 fans (which is even on the small side for an SEC school like Arkansas) and it's usually full to capacity. I would recommend avoiding campus on game days....
Fayetteville, to me, gives off sort of a hippie vibe. Maybe it's just the people I tend to encounter, but it certainly seems like there are more vegan, Buddhist, peace activist, anarcho-syndicalist types than one might expect to find at a large, public university in the South. But it's fun. You can meet all sorts of people of all different life-styles. I've met Buddhist monks and Mormon missionaries, Young Republicans and Green Party Congressional candidates. As previous posters have mentioned Dickson Street is the place to go for food and drink and live music. I've not done much socially in my time here, but the town is not dead by any means.
The cost of living isn't too bad. I've never really paid attention to that sort of thing until I moved off campus this year, but apparently it's pretty good relative to the rest of the country. I'm living in a 1 bedroom apartment about a 10 minute walk from the very center of campus and rent is $410 including water. Electricity runs about $25/month on average. I have free Wi-Fi access and don't use a TV, so I couldn't tell you about that. From what I hear, my rent is pretty reasonable for the location I'm in. It's really close to campus, very well maintained, clean, and no sketchy folk hanging about. Oh, and there's a well-shaded park and bike trail across the street from me, too! Arkansas has an 11% sales tax on food. I don't know what kind of funding you have from your department, but you shouldn't have to live in abject poverty.
This is a good place to start looking for off-campus housing: http://offcampushousing.uark.edu/
The university maintains a pretty efficient bus line which runs all over campus and goes into town. It's definitely easier to have car, and outside of campus it's definitely not pedestrian friendly, but campus itself is actually very easy to get around. For the main public university in the state, it's probably about a 20 or 25 minute walk from one end of campus to the other. It's definitely a hilly area, though, so riding your bike around campus might be an interesting experience.
Here's a link to the bus line, including videos of each route: http://parking.uark.edu/67.htm
I hope this helps. I think you'll enjoy Fayetteville!