On the surface, it would seem as if the boom has been kind to people like Barbara K. She lives in a large, rambling house, bought with money from recording deals. The place is now worth almost three times what she paid for it. Most days, she considers herself lucky, but not when she gets her new property tax statement. ''Oh, man, I got slammed so hard,'' she told me. Next year, she will owe $800 per month in property taxes alone. And though Austin still brags that it is ''the Live Music Capital of the World,'' for most musicians, acquiring property in town has become impossible. Bukka Allen, who plays accordion on Barbara K's latest CD, recently bought a house in Buda, 13 miles south of Austin. He's part of a silent diaspora, one of countless musicians who have been forced out by the boom.

Meanwhile, the maker of ''Slacker,'' Richard Linklater, has appropriated technology for his own ends. He is working on an animated feature called ''Waking Life.'' When I visited him at Detour Filmproduction, every room was filled with artists sitting in front of Macintosh computers, transforming film footage into animated action. ''It's very human,'' said Linklater of the results. ''It's a great marriage of film and computer. I think Austin is the kind of place where that cross-pollination can happen.'' On the other hand, Linklater doesn't think he could start out here today. ''I came to Austin 16 years ago. My rent was $133 a month, all bills paid, and I could live on $3,500 a year. So I spent all my time watching movies, editing, shooting. Film students are like, How do you do it? I don't know. If you have to work all day just to pay your rent, I don't know. If I was just starting out now? Might go to San Antonio.''

People moving here today come for different reasons. In June, I drove out to a fancy subdivision named Rob Roy, up in the hills. It was a bone-dry, brilliant day. In almost every vast and perfectly manicured front yard, brown-skinned men clipped and trimmed and dug. The houses were ridiculously large, like caricatures of houses. Parked in the driveways were Porsches, Jaguars, Mercedeses and all manner of S.U.V.'s. Within minutes, a green Audi was tailing me. Security. The driver snapped photographs with a little digital camera. I don't know what he saw; what I saw was the balance of things shifting.

Unlike the rest of Texas, Austin has always been a place where what mattered most -- music, film, education, public policy -- was supposedly motivated by concerns that were not entirely commercial. Now Austin has developed an indigenous business scene. First came Dell, later Tivoli, Trilogy and Vignette. These days Austin has a 1.9 percent unemployment rate and has been named the best city in the country for doing business by Fortune and Forbes.

Day-to-day living, however, has become harder for a lot of people. The public schools, for example, used to be considered pretty solid; now the Austin Independent School District struggles to keep up with the profound population shifts. For every new computer programmer who arrives in town, a gardener, a housecleaner and a couple of construction laborers follow. In recent years, the greatest job growth has been not in the software industry but in the restaurant sector: busboys, dishwashers, short-order cooks, waitresses. These service workers are generally poor -- their incomes have not kept pace with the rising cost of living -- and the school system struggles to find a place for their children. One thousand new kids converge on schools in the southern part of the district every year.

One bright spot is Travis High School, which, by all rights, should be a catastrophe. Travis is a hodgepodge of yellow brick buildings that stand alongside I-35, on the edge of East Austin, which is the poor side of town. The student body is 90 percent minority, 80 percent low-income. So many students get pregnant that there is a waiting list for their infants to get into the nursery that Principal Nelda Howton set up. I met with Howton in May. She has a blond bob and was wearing a lemon-colored linen dress, but she's a lot tougher than she looks. Her job includes figuring out whether her students have a place to sleep, food to eat, responsible parents to watch over them. ''We had a kid who had been receiving assistance for diabetes,'' she told me. ''Turns 18 and it's cut off. Well, the kid kept not coming to school, and we find out it's nothing except he can't get out of bed because he's in a comatose state. Then we had to get him back on insulin.''

Four years ago, Howton was working as a principal of a middle school in Temple, about 60 miles away, when she heard that Austin was looking for a high school principal -- a step up, she thought. ''I didn't know that I was coming to this school,'' she sighed. ''I cried when I saw it. There was graffiti everywhere; we had two kids shot outside; lots of gangs, lots of gangs.'' Howton took the job anyway; after studying what 21st-century high schools were supposed to look like, she realized that she couldn't possibly afford to create such a place on her budget and set up a foundation to accept donations of money and equipment. Howton is good at marketing. She says what she thinks, uses plain English and tells stories that deliver an emotional wallop. So when she set up meetings with executives at companies in town, they responded generously -- particularly hardware companies like AMD and 3M.