There definitely is a huge demand for wireless data access, however the models that we have seen to be successful were the business improvement districts (BID), and free Wi-Fi in restaurants, malls and the like.
We, at the Global Tech Consultants' Group perceive the impetus for municipal Wi-Fi is to bridge the digital divide, and to provide access for people doing casual surfing while going about their daily activities. A smaller subset of those demographics may be college students, desiring to get out of their dorm rooms - the types that we see frequenting Starbucks, and other coffee-shops. Then there may be tourists, visiting a city, who are in need of a temporary ISP. For the most part we get the sense that it would be an amenity, an extra that a venue might provide, but feel it is something geared to the casual user.
By having a goal of bridging the digital divide, muni Wi-Fi can go after federal and grant funding, however both of those revenue streams are drying up. Then too, broadband providers, telcos, and others are drastically cutting prices to be competitive as an ISP of choice. In addition we find people with their own WPANs (wireless personal area networks) via WiMAX or other means; also people are rooting their phones so they can tether their phone and use it as a modem for their laptop / netbooks, and unlimited data plans for smart phones and other devices.
Thus, unless muni Wi-Fi is able to develop a business model that will allow it to fund itself, and to be able to provide a comparable through-put to a paid ISP, then it may not be a viable endeavor, and people will continue to pay for an ISP.