You said diversity is important to you...My own opinion of Madison is that it is a very white, european population with a lot of gay and lesbian people. I'm originally from Portland Oregon, which I never considered to be an overly diverse racial melting pot, but I was a bit surprised when we moved here to see so many pasty white people (...me included). I guess I thought that Madison's proximity to Chicago and Milwaukee, as well as their large university-oriented student population, would lend itself to some diversity, but no, it really doesn't. Madison has a population of 225,000 approximately and I wonder if the city does not include their transient student population from the university in those figures.
Taxes are high, as you've been told, but the public school system is quite good. Certain schools have gifted and other programs for challenging kids, but not all programs exist at every school from what I've been told, so you might want to let that guide you when deciding where you are going to live if you do indeed move here.
FYI, I'm moving as soon as I can. Madison is nice, but its small and I don't have any support system here, having moved from another part of the country where all my friends and family are. Another thing, which I don't want to get flamed for saying this, but I feel it is necessary to say it: Everyone told me how NICE the people in the Midwest are. They are nice, but only to a point. Inclusion is generally not their strong point. I have discovered that the family rules most patterns of socializing here - people typically have large families out here and socialize within their family unit, which hasn't made good opportunities for us to really get to know other folks here. I'm pretty friendly myself and have gone out of my way to volunteer and meet people from school, so I don't think anyone can accuse me of being anti-social, but after four years of living here, we still do not feel connected to this community.
Lots of great hospitals to work in around here, though...Best wishes to you in your decision!