I resemble that remark!
I'm running a city campaign currently. It's the first time I've run an extensive campaign in a city, and here are some of the issues that I have run into:
1) Like the others said, NPCs, NPCs, and more NPCs. If you have to make someone up off-the-cuff, write their name down somewhere you won't lose it. You never know who your PCs are going to latch onto as a friend.
2) Consequences. Since the PCs are staying in the same area, and their opponents are often going to be other people of various races, their actions have more consequences. Even the "bad guys" are citizens protected under law. Dangerous flashy magics are illegal in my city, so arcane force can be tricky. Reputation is more damning and less likely to elevate you to legendary status when the neighbors see you dump your night pail just like everyone else.
3) Less combat. There have been a ton more skill checks and roleplaying sessions. My group was always roleplaying heavy anyway, so it has gotten pretty extreme for us. We're having a great time so far, though.
4) Field trips. Remember to get out of the city, or under the city, or something, from time to time.