Living in Lincoln Nebraska my job search has focused on the midwest. Primarily cities within a reasonable day's drive. This includes Denver (and the entire front range), Minneapolis, Kansas City, Chicago (barely), Des Moines, and of course Omaha where I have worked for most of my life.
I decided on an extended job search that looked at locations outside of commuting distance because I wanted to make sure I found the right job. Exactly what that is will of course vary by each individual's situation. For me, I have a child in college and one not far behind so I was definitely looking for a salary that matched my previous job. I also want a company where technology is important, a profit center, not an expense or after thought. So with those parameters in mind I have been looking in a circle roughly defined as a 500 mile radius centered on Lincoln.
I have found that there are a reasonable number of jobs in any given metropolitan area. And those jobs form a nice spectrum from entry level to very experienced. Very roughly I see about 50% Microsoft technology and 50% Unix. Microsoft shops tend to want VB, .Net, or maybe C# and Unix shops are looking for Java, scripting and some C/C++. I am honestly quite surprised by the high penetration of Java given its history but it certainly is a nice language to work with and I think its popularity derives from a great library and ease of use.
Recruiters are generally willing to talk to you and give you that chance to get the foot in the door. However it appears that competition is pretty intense. Interviews are tougher now than I can ever recall previously and closing the deal is harder than before. The good news is salaries don't seem to have suffered too much. People more knowledgeable than me in the field seem to indicate Salaries are holding up well.
Lessons learned: Study, do your homework, practice your skills while you have some time, maybe write a blog. Do things that get you noticed like contribute to open source or work on an iOS or Android application. I would also recommend targeting your prospects carefully so you don't waste a lot of time on marginal opportunities. Look for jobs that are a good match for your skills.
Good luck and persevere.