My parents and my youngest sister have lived on Kaua’i for 10 years. My sister married a Hawaiian/Filipino and they have one kid, with another on the way. My parents separated and divorced within a couple of years of moving there (going from NYC to a tiny, tiny place made them realize exactly how much they disliked each other).
Currently, the economy on Kaua’i is very depressed (my mom works for Social Services so she sees how many people are in bad shape). It’s been quite bad for some time now, but the tourism crunch since Sept. 11 is making it worse. The cost of living is very high. Kaua’i doesn’t have as many stores as the other islands–it’s very small, old-fashioned and somewhat isolated–my mom is psyched that they have a Borders, which has an actual cafe in it. Everything comes to Kaua’i by ship (my dad drives the trucks that pick up containers at the dock and brings them to the post office). This inflates the prices of everything (by the way, my parents intended to be retired, but they both have to work to live there).
It’s an incredibly beautiful place (but I have to echo the “chickens everywhere” comment–but they’re awfully pretty and have teal-colored tail feathers). It’s an extraordinarily tiny place, and my parents got island fever pretty early on (then they got trashed by Iniki) but they managed to pull themselves together long enough to stay there.
The Native movement is very strong on Kaua’i, with many schools teaching the language and culture. My brother-in-law speaks pigeon, which is also pretty common among the natives. Kaua’i is pretty insular, but my mom seems to have quite a number of friends and she loves the food (lots of fresh fish, most caught by my brother-in-law, sushi, fresh fruit, etc.) but they all complain about the cost of everything.
My dad lives in Lihue, the only actual city. My mom lives in Kapa’a, which is much more rural. Neither of them has seen a celebrity (my parents don’t have that kind of money), but my mom used to hang out with the former mayor.
On the whole, my parents like Kaua’i, but wish it were cheaper to live there. My mom is getting depressed by the place because she is feeling trapped there (she will probably move to Florida in a couple of years). She is 6000 miles away from two of her daughters (and way too close to the third) and she feels it. Very few people in my family have been able to go and visit them (I went once, about 5 years ago; my uncle works as a civilian for the Navy and has been sent there twice) and they can’t afford to come home to NYC. The isolation really gets to them the most, I think.
I think it would be worth giving it a try for a while, but I wouldn’t cut off an escape route. If you want to be talked to death, I can give you my mom’s phone number 
