I love Knoxville. I live about 90 minutes north of there and visit when I can - usually for concerts at UT or to go to the zoo.
Traffic sucks in Knoxville, especially around UT. Not so much congestion as just really, really poor engineering. We inevitably end up in “crack town” every time we leave a show at the school. That’s OK cause there’s this little liquor store where this skinny dark-haired woman sells us…oh, nevermind. 
Anyway, avoid living downtown if possible. Within the city would probably be OK, especially if you wanted to be really close to UT. Plan to pay $500-$600 per month for a decent one bedroom place. My advice, since you asked, would be check out an efficency or something similar until you can find a trustworthy roommate (unless you’re completely opposed to the idea) and an apartment you wouldn’t mind committing to for a year or so. You could get a much nicer place, plus the added security of someone else in the house, for half the price. And if you do choose to live outside town, get as far away from Gatlinburg/Pigeon Forge as you can, unless you like redneck tourists and paying $4.00 for a beer.
If you’re into the bar scene, Knoxville has quite a bit to offer. I like The Library, myself. May have changed names since the last time I visited; seems like someone mentioned that to me recently. There’s gay bars, bars with live bands, raves, country/western bars. A lot of Ecstacy is coming out of Knoxville right now.
As for jobs, there are a lot of retail places (tons of outlet stores, many of them on the outskirts of town just off the Interstate) - I would think a commissioned sales job would probably pay fairly decent. If it were me, though, I’d want to work at the zoo. I fantasize about that every time we visit. And don’t be expecting the Bronx Zoo, either - the Knoxville Zoo is pretty nice, but it’s do-able in less than a day.
I can’t think of anything else right now, but feel free to email me and I’ll try to answer any questions you have (or I’ll make something up, at least).
And the best part of living in Knoxville is that in short order you’ll be sorta-neighbors with TN Hippie, who is one hell of a cool guy.
