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We LOVE northern California but the state politics might put my hubby over the edge.
I was going to recommend Northern California too as we have tons of relatively prosperous small towns and cities (scattered among a whole lot of wilderness too, as the west coast is overall much less sparsely populated than anywhere in the east or south...and you'll be hard pressed to find many subdivisions the farther north you go), but if you feel it won't be a good fit, maybe try Oregon? I don't have much experience up there, but there are bound to be some nice small towns that very are similar in feel to far Northern California, yet you might feel more comfortable too (I'm assuming you--or your husband-- would prefer somewhere with more conservative politics than CA? correct me if i'm wrong). Rural areas of Oregon fit that bill pretty well from what I've heard...one example I can think of is gun ownership, which has fewer restrictions, etc, compared to CA.
As long as the "build up" is a few miles away that would be OK. In an areial of Franklin it looked like the town proper was surrounded by neighborhoods and not "stuff" - but maybe that was misleading ??
New England is too cold and expensive for us...although we love visiting! We LOVE northern California but the state politics might put my hubby over the edge.
We currently live in a town of about 10,000 - perfect for us - but could go either way as long as everything else fell into place. Schools are very important - so that will be a deciding factor. Anything over 50,000 would probably be too big.....but it all depends on how it's laid out. If the 50,000 were spread out over many miles but there was still a town center with the lovely old homes surrounding it that would be good.
Another concession we have to make is work - my hubby is an independant contracter in the IT field and usually those jobs tend to be in the popultated areas - however we live in the middle of nowhere right now and the company he works for is 1500 miles away - telecommuting is a great thing! Unfortunatley that contract is over next month......
I'll get to checking out the other suggestions! Thanks again!
I haven't been there in years but check out St. Augustine, FL.
Actually, I already know the place you're describing... Key West. Small, houses are mostly well kept, plenty of thriving shops and restaurants. You can walk any place, the weather's nice sans hurricanes, it's very historic, community is important even though there are a lot of tourist. Not sure about the schools though.
As for politics, you're hubby is on the wrong side any way. Perhaps those on the island would put some sense in to him
Island life isn't for everyone though (and it's expensive) so check out St. Augustine first
Communities like Cooperstown, Hamilton, Cazenovia, Watkins Glen, Corning, Owego, Homer, Canastota, Marcellus, Baldwinsville, Norwich, Waterloo, Seneca Falls, Herkimer, Ilion, Little Falls, LeRoy, Newark, Depew, Hornell, Bath, Wellsville, Sidney, Oneida, Penn Yan and many more in Upstate NY.
Pretty much any small-to-medium-sized county seat in Pennsylvania would fit your bill. Unfortunately the climate in Pennsylvania, while tolerable, is not very far removed from what you've grown accustomed to in the Upper Midwest. If you're looking for warmth, then Pennsylvania isn't it. However, we ARE more of a moderate state (a good mix of liberals and conservatives alike so your husband won't feel out-of-place), and our town layouts are difficult to beat. After all, William Penn's "Holy Experiment" was Philadelphia, and it was laid-out in a colonial theme with a rigid grid-shaped street network accentuated by several squares for urban green space; obviously the pre-automobile Pennsylvania was VERY pedestrian-friendly.
I don't wish to overload this thread with hard-to-upload photographs, so I'll post several different replies of several different Pennsylvania communities that may fit your bill (once again despite the climate!) If it's any consolation I think parkas can be sexy!
I'll start with Towanda, PA, located near to the New York border:
Similar to Galena, IL, Jim Thorpe, PA has experienced a resurgence in recent years thanks to an influx of tourism from nearby NY and NJ.
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If it's any consolation I think parkas can be sexy! 
Jim Thorpe, PA
