There are a few HNers who live in Louisville, myself included (want to grab a beer some time Ernie?). 1 major downside: probably 85+% of local programming jobs are .NET. Maybe another 10% are Java, 4% are Ruby, and the remaining 1% is hard to come by.

Working remote is awesome, I hope to do it again some day (Clojure or JavaScript for me, if anyone is hiring) but its very important that everyone is on the same table about expectations. You get into the habit of working long hours for a couple of reasons: first because you are home anyways and might not have anything else to do (not a terrible reason), and secondly because you want to show the company that you're working hard -- something that isn't an issue when working locally.

I've turned down a couple of good opportunities because I didn't want to relocate. Of all of the reasons to relocate to a new city, I think doing so for work is possibly the work reason. It's too easy to fall into a trap where work becomes your life.