I'm not a fan of most municipal wireless systems. They're usually greatly over-budget while delivering weak indoor signals and low speeds. Earthlink has been learning the hard way that municipal wireless is bad business, significantly scaling back the number of projects it had planned to handle.
Wireless does, however, go right from time to time. Witness the police department in Providence, Rhode Island. They took advantage of federal grants to install a city-wide WiFi network that has most cops only visiting a station for repairs, bookings and dropping off evidence. Now that the first responders have embraced it so fully, the city is now looking at ways to roll out the service to other departments as well as providing some public access.
That's where municipal wireless needs to go: build the network for internal use and gradually allow the public to have a slice of the bandwidth pie. Municipal fiber networks could also improve their financial outlook by building for the city first and residents second.
(UPDATE: Another article here.)