Hi,
It's been a few years since I've been to Salzburg and wouldn't like to think you'd act on what could be outdated advice on whether it is expensive or not. However, at the time of my last visit prices were broadly comparable to what you'd expect to pay here in the UK. A decent meal would cost what you'd expect to pay in a similar establishment here, beer was cheaper, local decent wine a little cheaper and imported eg French wine a little more expensive. Trains were cleaner and more relialbe than here and also cheaper. Overall, I'd say that we found Austria not to be a cheap destination but not outrageously expensive compared to home either.
As for the best time to visit it depends on what you would like to do when you're there. If you're into classical music then the festival which takes place each summer would probably be your idea of heaven but if you're not I advise you to steer clear of the last week in July and the whole of August because decent, reasonably priced hotel accommodation will be difficult to come by during the music festival and all the Mozart related stuff will be packed out because this is a big anniversary year.
Salzburg is situated within an amphiteatre of mountains and as a result the weather can be changeable even in summer but I've found that it is probably most settled in late spring ie May/June time. Any earlier and you still run the risk of snow falling in themountains which will fall as rain in the city. September in Austria can be good too but you're coming to the end of the summer season there. The cows are normally brought down from the summer alms in early/mid September in the Tyrol which is as good an indicator as any that the locals consider that the weather will start to deteriorate from then onwards. On the other hand, if you are going because you hope to catch some snow then you're best not going too early in the season as there is often not much until January or even February as most of the nearby Alpine villages are at fairly low altitude. You're also best not leaving it until too late - by the end of March and certainly by Easter this year Salzburg itself will probably be snow free and there'll be a good chance that most of the lower Alpine villages in the region will be too.
Personally my choice would always be May/June time - it will be warm enough to walk round in light clothing and sit out at pavement cafes during the day and the days will be longer. The city will be looking at it's best because all the winter lagging will have been taken off the staues and fountains and all the snow will have disappeared from the villages in the mountains but the ski lifts will be working for use by walkers etc if you are wanting to see some of the surrounding countryside.
Salzburg IS Mozart and there is quite a tourist trail based on various museums and buildings that are associated with him. There is also a quite extensive Sound of Music tourist trail too but be warned that the locals have something of a love/hate relationship with the film! The locations shoots for the film did play a bit fast and loose with the geography of the city but if you have seen the film fairly easy to identify and owrth going to see. The castle dominates the city and is worth going to see in its own right. In Spring the street stalls selling local handicrafts etc will be out and are good to wander round and in fact it's a lovely compact city which is just made for wandering around and dropping into any one of a number of cafes for coffee and strudel - or if it is cold, 'chocolat mit schlagober' which is hot chocolate with a great chlorestrol-rich dollop of whipped cream on the top. And a chocolate flake stuck in it if you're lucky!
SM