To answer your questions:
- It was my impression that mostly international students lived in the campus apartments/dorms. Rent is pretty cheap, but stay away from the big complexes (like Copper Beach). They tend to cater to undergrads and have a lot of drunken, useless, crime. The "student ghetto" isn't bad, but usually best to stay away from there, too.
- It is necessary to have a car. The bus system is horribly unreliable and has very limited hours. Parking can suck at times, but as long as you're not running extremely late, it's doable. Parking permits are expensive, too, so that might be something to consider. There isn't much walk-able housing that isn't exclusively undergrads either.
- Getting residency is pretty easy. If I remember correctly, you have to prove that you were residing in the state for a year or two. I didn't even change over my license or registration from my home state. I just provided pay stubs and rent receipts for the two years.
Overall, it's a nice little town, not the greatest, but nice. If you have time to go out on the weekends, there are a bunch of nice breweries and bars. There's a really swanky cocktail bar/restaurant that used to (not sure if it does) do $4 martini Thursdays. Top shelf. It was amazing. The "food scene" is also really great. The school of music's jazz program is phenomenal and they do a lot of shows downtown, so if you're into that sort of thing, there's always something to do.