I'm finishing my undergrad degree at UT-Knoxville. Although i would not have expected it when I first arrived here, I will really miss Knoxville. Parts of the campus are really beautiful, and as the post above me says, the campus and downtown areas are definitely walkable. I know lots of people who bike to campus as well, although depending where you live it may take some time to find a safe route. I know faculty and students who live in the Fourth and Gill neighborhood. I would definitely recommend that you drive around that neighborhood if you do happen to visit Knoxville. That would be a place within bike-able, but not necessarily walk-able distance to campus, but it is definitely in walk-able distance to downtown. As a grad student, I would not recommend living on campus or very close to campus, as you'd have to deal with the significant noise level that accompanies drunken undergrads. While Knoxville would be no comparison to Austin, there is actually a growing progressive/artsy crowd. I know many undergraduates who are involved in this scene, although I cannot speak to how many grad students are involved.
Sorry I can't help with Nashville. I have heard great things about their downtown area and live music.