I graduated from Duke, but due to the nature of my scholarship/program, I spent a lot of time at UNC and completed a minor over there. Several good friends attend, and I dated a Carolina guy -- so I know the place well.
Chapel Hill may be a relatively small town, but it's one of the best college towns in the US (along with Ann Arbor, Madison, Ithaca, Athens, and a few others).
Chapel Hill is part of the Research Triangle (Durham, Raleigh, Chapel Hill) which contains well over 1.5 million people and is one of the top 10 fastest growing areas in the US. There are plenty of opportunities for clubbing, many of which are just a short walk from campus.
The campus is fairly large, but the main portion is reasonably compact and easily walkable. The campus is very green and has trees, gardens, etc. sprinkled in between buildings. UNC is the oldest public university in the US and has some buildings dating back to the 1700s.
Weather tends to be moderate. It can be fairly hot in the fall, with some temperatures above 90F but usually in the 80s. Winter is cool but not cold, with temperatures in the 30-55F range. Spring is very nice and warm.
The town itself is great. The most popular spot is Franklin Street, which runs parallel to the university and has lots of coffee shops, bars, clubs, stores, etc. A short walk takes you to the town of Carrboro, where a lot of students choose to live. Carrboro is pretty young and lively, and the Cat's Cradle is a music joint that has hosted pretty much every music group that has ever been anybody. Chapel Hill gets especially crazy around Halloween, because over 80,000 people cram onto Franklin Street for a celebration. The bus system for Chapel Hill is free for everyone. The entire Triangle area (Chapel Hill, Durham, Raleigh) is extremely liberal, and staunch conservative Sen. Jesse Helms once remarked that there was no need for a zoo in NC when one could build a fence around Chapel Hill.
Athletics are popular, with basketball of course being the major sport. Carolina pride is INTENSE, and you will definitely see people wearing Carolina blue a lot of the time. See this video for a sense of what it was like on Franklin after UNC won the championship last year:
http://www.youtube.com/watch?v=ttCQwZweHTcAnd this video in the library during study period before finals, just to blow off steam:
http://www.youtube.com/watch?v=pE0-BFEermc