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You're getting more torque to the ground, but you'll be running at a higher rpm for the same speed as before. If you go so low that overdrive works at 30 mph, then it would run at a lower rpm. Higher rpm means more fuel usage.
It won't be as noticeable as it would be on the highway, but it'll be there unless you spend all your time accelerating and braking with no constant speeds.
After longtube headers my pickup now drives much better, can actually merge into traffic. I would go with 4.10s if I daily drove my pickup.
City driving IS mostly accelerating and braking. Plus you will be able to get into higher gears earlier, thus reducing the engine RPM and fuel consumption
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