I'm a fledgling city adventure DM myself. I've been running the Adventure Path adventures from Dungeon Magazine, and it has city encounters here and there. My experiences with Cauldron have led me to want to do more city stuff.
First, I recommend City Works by Mike Mearls, part of the Legends & Lairs line of Fantasy Flight Games. It is a great book with lots of information on city adventuring.
Next, you might enjoy reading Thieves' Quarter by JD Wiker and Christopher West by the Game Mechanics. It has a lot of great locations and NPCs that you could throw into any city campaign.
I've been meaning to read the Ptolus entries by Monte Cook (on montecook.com), but I haven't gotten around to it. He's been running a city campaign for the past several years, and we could probably learn a thing or two about it by reading through them.
As for my tips, make sure you know the basic city laws for your city, and make sure the players all know them, as well (are weapons/armor allowed, etc.). In some cities, you can be hanged for killing another person. If this is so, make sure your players know, so they can subdue miscreants and turn them over to the authorities (or let them go so they are owed a favor). Throwing in "salvage taxes" is one way to get to your players as well. Any time a store purchases goods from adventurers, they file with the city, and the city levies taxes. I usually levy a 10% tax, more if the players get cheeky with the tax assessors, or less if they can prove that they donate 10% to a church or something charitable.
If you have a player that really wants to be a druid, make sure they understand the extent that they will be in the city vice the wilderness. Our druid does really well in the city, and only calls an animal companion when she knows we will be out of the city at all. A lot of the druid spells do great in the city (quench, for one), and the druid can do as well as other spell casters.
The players will have more time to use things like Diplomacy or Intimidate to get through situations. I have adopted the following house rule to deal with situations:
When a player attempts to Intimidate an npc, the npc is allowed a will save. The DC of the will save is the result of the intimidate check. I do the same thing for quick diplomacy solving. The long way of diplomacy solving is opposed diplomacy checks. I encourage (mandate) that my players talk their way through thier intimidate and diplomacy checks, and give them bonuses to their roll based on the strength of thier arguments.
City works also gives ideas about part-time work in the city that the players can do: hire out as a master-at-arms and train new recruits at a temple or city guard; work as body guards for a local merchant, and others.
Some encounters you can use in a city adventure might be: a summoned creature escapes confinement and is rampaging (this could be especially bad if it is a fire elemental); the town guard may hire on a group of adventurers to deal with those pesky crocodiles in the sewer (IMC, the city guard is paid to handle simple city disturbances. They are not an elite trained squad build to handle "adventure" type situations. Hence, they hire out to adventureing groups, and even keep an adventurers register.)
It should be fun for the characters to develop relationships with some of the NPCs... who is their contact in the city guard, theives' guild, nobility, and merchant guild? It's great to bring in the key NPCs that they all know... and sometimes hate. But hating a person you can't kill is just as fun as the relationships they will enjoy.
And be receptive to the goals of the players. When the realize that they will devote parts of thier lives to the city, they may wish to take a bigger part in the city itself. So far, I have a ranger/fighter that took the vow of poverty, and runs a soup kitchen in the poor part of the city; the rogue started a smuggling operation via the water ways under the city (her cohort is an aquatic dwarf); the wizard started a wizarding guild (no sorcerors allowed!); the paladin started worship to Heironeous, previously unavialable.
I give them xp for their efforts, of course. And a lot of it is done "out of game." They are able to write up a letter of their activities as they want it to work out, then we are able to sit down and work it into the dynamics of the city and my campaign.
I've gotta run now, but I will also keep an eye on this thread as I hope others can give some great info.