I currently live in metro Atlanta (specifically Gwinnett county), and the so-called water shortage hasn’t really affected us here, aside from the imposition of outdoor watering restrictions. The restrictions have been widely followed, and the county’s water usage has been reduced enough to not require further action for now.
However, Gwinnett gets its water from Lake Lanier, whereas Atlanta and points south (where water restrictions have been more severe) get their water from other sources. There’s also been discussion (and some adoption, particularly by larger businesses) of water recycling (i.e., gray water).
As far as desalination is concerned, it’s not really economically viable for a landlocked city like Atlanta – the water (either seawater or the desalinated stuff) would have to be piped from the coast. The initial costs would be quite high, as no such pipeline currently exists.
In fact, desalination’s not necessarily economical for coastal cities either. Back in the early 90s, during the last major Southern California drought, the city of Santa Barbara (where I was living at the time) spent about $40 million to build a desalination plant, which came online in the spring of '93, IIRC, just as the drought was ending.
They ran the plant for a couple weeks, then shut it down, presumably to be reactivated in a subsequent drought. In the meantime, the city has decided to join the California Aqueduct system, which will probably cost billions, since they’ll have to build at least 100 miles of new aqueduct.
I’ve also been told that Key West has a desalination plant, in addition to a pipeline from the mainland. I suspect that it, like Santa Barbara’s plant, is probably used as a backup to other sources.