Yeah my brother lives in South Bend and although I've never been on campus, I can't say I was too impressed with the area.
I wouldn't compare Lincoln and Urbana-Champaign though. I've been to both many times (i live about 45 minutes from Champaign) and I would say U-C is more like a smaller, crappier Omaha. I mean its fun to hang out on campus and there are some nice areas I'm sure, but there are also some really dirty neighborhoods there. Lincoln just seems a lot nicer to me overall. UIUC is almost twice the size of UNL enrollment-wise and the UIUC campus area is really spread out so I'm not sure if they really compare in that regard either.
I haven't been to many big 10 cities but I would have Madison near the top of the list. It seems like a really nice area despite the terrible WI weather.