Go for it! It’s a great opportunity. Everyone I know who has spent time in Ethiopia has loved it. The time will go by like a flash, and you will meet people and have experiences that you will rely on for the rest of your life.
If it’s like other places I’ve been, a university town means you will probably have access to a supermarket/imported goods store, but it may be more expensive/not as good of quality as you may like. Produce and stuff will be better to buy in a more traditional market, which your housekeeper can probably do for you. You probably won’t be eating a lot of Doritos and Ben and Jerry’s and will face food cravings, but you can easily eat a healthy and varied diet. From my brief visit, it seems like Addis has plenty of good restaurants.
Your house will probably not be extravagant, but it won’t be a mud hut. Think simple and clean. You may have some rustic touches like a stove that runs on tanks of gas and a tin roof, but you can expect water and electricity, though it may go out fairly often. 10K isn’t enough to live like an ambassador with garden parties and landrovers. But it’s magnitudes more than a Peace Corps volunteer, and they do fine. You will easily be able to hire household help, and will probably have to since housekeeping is quite a bit more difficult in the developing world.
You will have Internet access, but it will be a little difficult to get it in your home and it will not be that fast (thought Ethiopia is by some good cables, so maybe I am wrong. Mail will be slow and unreliable. You will be able to get a cell phone.
You will have to face some health issues- you will get sick now and then, and there isn’t too much you can do about it. It’s just a fact of life. I don’t think there is malaria there, and that (and AIDS of course) is the only thing that can fuck you up that badly. Make sure to read one of those traveller’s health books and you will be fine. There should be decent medical care in the capitol, basic but clean health care in smaller cities, and you will be close enough to places like Kenya and Egypt that have first-rate care. Make sure your program has a health plan you are comfortable with.
You will be lonely, but at least many people in Ethiopia speak English so language won’t be quite as difficult an issue as it could be. Your friends will probably be your co-workers and students, and a smattering of ex-pats (Peace Corps volunteers will probably love you!)
How happy you are really depends on how willing you are to immerse yourself in the local culture. The better you learn the language, the more local friends you have, the more non-expat hangouts you go to and the more you learn about the culture the happier you will be.
So while it isn’t easy and there are some big things you have to get used to, it’s not impossible or intolerable and for most people the rewards are worth it.