Chicago is often described as one of the most segregated cities in the world, supposedly, due to its large number of specific ethnic communities. At this time (October 2003) a great deal of its neighborhoods are going through gentrification at various rates.
The South Side, which was mostly white in the 50s and early 60s, is today mostly African-American, with the exceptions of neighborhoods such as Hyde Park, which contains the University of Chicago and is more racially diverse. As a white girl growing up in Evanston (the suburb directly north of Chicago) I was warned about the dangers of the South Side: drug dealers, gangs, crime, poverty.
The West Side has a bad reputation as well, though that is changing. The near West Side includes Greektown. Directly west of the Loop is an area once consisting of many factories. Today it is being turned into condos. Farther west, neighborhoods like Humboldt Park are entering the early stages of gentrification while Garfield Park is not. Austin is the large neighborhood that is the farthest west in Chicago city limits.
The Northwest Side is what I am most familiar with, having lived there and with friends living in various other parts of it. Wicker Park is gentrifying most rapidly here, with hipsters and yuppies edging out the Latino families. 3-flats are being knocked down and yuppie condos are going up for many times the price. On a typical street you can see new condos practically alternating with old 3-flats. Further up the blue line is Logan Square which is also gentrifying, but less rapidly. Go far enough on the blue line and you'll reach O'Hare Airport.
The North Side is filled with contradictions. The rich Gold Coast directly north of downtown is filled with pricey, old high-rises with great views of Lake Michigan. Lincoln Park is a very hip area that contains DePaul University. Lakeview contains Boystown, the gay neighborhood which is signified by the phallic rainbows at the corners of Halsted Street between Belmont and Addison. Belmont Avenue is home to stores catering to the punk and goth subcultures, the most notorious of which is The Alley which owns many of the stores on the block. It is no longer cheap to live in Lakeview and young punks and goths are no longer the main people you will see on Belmont as the area becomes more hip. Uptown is still known as a bad area, though compared to much of the South and West sides this seems ridiculous. Furthest north in Chicago you find Rogers Park which also has a bad reputation, though it varies, since Rogers Park is so large. Other neighborhoods on the North Side include Albany Park, Andersonville, Edgewater, and Irving Park.
I have done a lot of biking and walking through much of the North, West, and Northwest sides. I am a small woman and recieve my share of street harassment everywhere - bad neighborhoods and good. When traveling in Chicago, use your best judgement, and don't avoid a place just because you were warned against it. Treat the residents with respect and you will probably be okay. You can get mugged anywhere, and while the chances are certainly higher in some neighborhoods than others, a little common sense goes a long way.
One interesting thing I have noticed is that often, as housing projects are phased out, their remains are often right next to, or directly across the street from, luxury condos while both are inhabited with the type of people you'd expect. Cabrini Green is a good example of this, as is a project on the North Side I once biked through. I don't know its name, but less than a block away was a very rich-looking gated community.
Chicago is segregated, yes. But a short bike ride through the city will show you a great deal of diversity as you pass from one neighborhood to the next. | 
