Thanks for all the opinions and info!
The reason I asked this question is because our house is on the market and the more and more we thought about where we are going to move, the more Manhattan made sense for us. The house we are living in is #3 for us, not to mention all the other places we have lived in. We move alot, but usually in the same county. Our kids are 8 and almost 3. We have lived here for 2 years and DH can't do the 2 hour commute, eachway everyday anymore. It has gotten to be very expensive here. Our taxes increased $3000 in the past 2 years! It just isn't worth it for us to stay. But, when we thought about going back to where our families are, the prices are so crazy. We were outbid for a house that was $500,000! The bidding is still going on and the house needs work! I'm so sick of it all.
So, our thoughts for moving to Manhattan are these:
It would be for a short period of time. 1-3 years tops. We could pay off all our bills, be debt free, and still have a nice chunk of money to put away. From our calculations we would be saving $2500 per month!! I know it sounds unreal but we would save that much even if we are paying $3000 a month in rent. We would only need 1 car, so we would save a ton there too. We have lived in an apartment before, a townhouse and 2 houses. My kids never play in the backyard! They would much rather be going somewhere or doing something than playing in the grass!

DH works in Manhattan so no more commute for him!! And me, well I was raised in the Bronx, so I am a city girl at heart.
After our car accident, alot changed for us. I really think this would be the best for us right now.
School is really important too. We researched, talked with alot of people and found 3 public schools that are very good, the best in the city.
As for being sheltered, well right now in my DD's whole shool there are probably 10 minorities!!! That's not normal to me! I want to protect my kids, but not completely shelter them. I love the fact that I grew up with so much diversity and culture. I use to hop on the train and spend hours in Greenwich village!
As far as the day to day things, like food shopping. Well, you do alittle at a time. I'm a SAHM so it's not a big deal for me. Also I would never get involved in the whole private school thing. I know how crazy it is. I am comfortable with the 3 elementary schools we choose. The areas they are in are very nice as well. DH and I know the city very well and are use to NYC prices. That also is not a big deal to us. Laundry, well we are looking into places that either have a unit in the apartment, or on the same floor. Door man buildings that have a pool, rec room, play room for the kids, roof deck. We really don't mind a small place either. The one thing that is bothersome for both my husband and myself is that the kids will probably have to share a room. We are really trying hard to find a 3 bedroom, but that might not happen. This really bothers DH more than it does me. DD doesn't mind and she is actually excited. She loves the city.
I just think of all the wonderful things we can do together as a family. Like the shows, museums, etc... Not to mention all the food!!LOL
Thanks for letting me blab on and on!
I'd still welcome any advice or opinions from those that live in Manhattan.