Running City adventures
First thing, it depends really what you mean by "gritty", which can be interpreted several ways. If you mean "Life is Cheap", that's slightly tricky to do using D&D because PCs quite quickly become moderately tough, and healing spells are quite cheap. So if you want a Dickensian/Dostoyevsky kind of world you might need to fiddle with the game mechanics a bit.
If, on the other hand, you mean "Everyone's a bastard", that's much easier since it's merely a question of attitude. I suggest a healthy dose of Damon Runyon and/or Fritz Leiber before you being.
As for city adventuring in general, the main thing to remember is that the PCs have a lot more resources than if they were on their own in the wilds or a dungeon. You will find that you need to be ready to think on your feet more as they go off in all sorts of tangents, speak to completely irrelevent NPCs and so on.
City adventures tend to be a lot more character and event driven. I've found that the best way to prepare for them is:
First, draw up the main characters, be it the Crime Boss, Corrupt Magister, Wronged Wife etc. and be sure that you know what they want, how far they are prepared to get it and what resources that they have. Key points.
Second, have handy some details of prime locations (possibly with an idea of the level of activity at different times of the day) and it's alwasy useful to have a few extra floor-plans on hand in case you need them. I find I can extemporise if need be from places that I've been to.
Third, it's handy to have a few stats for stock characters like City Watchmen or Slayer's Brotherhood Journeymen, in case they are needed. Some idea about various organisations in town is good (with the same motivational check-list as the individuals above). Allow characters to have contacts or connections to various guilds, orders, societies etc.
For the best in city adventuring, make sure that your city is old, crowded, mazy and built upon years of long forgotten and shady history so that you can throw in the occasional pseudo-dungeon crawl through the catacombs of the Forgotten Cathedral.
Adventures work best if they are of the "Wind them up and watch them go" sort, rather than plotted in any way. You have your set-up, maybe a macguffin or two. The see what the PCs do and calculate how that changes the NPCs plans.
Oh, and finally, you need your tavern. Every shady city worthy of the name has its Silver Eel, Mended Drum, Shady Unicorn, Gimpy's Tavern and so on.
As an addendum, if you are using Sharn, you *might* be able to get away with adapting some Judge Dredd stuff, too.
