I live north-west of Toulouse. My DS is only 1.10 so he's with a french nounou (childminder) while I work 4 days a week. He's only just starting to talk so it's a bit of a mix of french and english at the moment as both me and my DH are english and speak english to him at home.
We do plan on him going to French speaking schools, starting with Maternelle, probably next September.
The families I know whose kids have grown up here tend to be fluent, and some of the schools here have immersion classes for the British kids to help them with their french.
We do like living out here, but it was work that brought us both (separately) out here. We've been here about 12 years now, and have no current plans to move back to the UK.
The reality of living here has its ups and downs. After our DS arrived, I missed our families hugely, and we have accepted that going out for dinner isn't feasible, but lunch works okay. We haven't found a babysitter yet, but we're still looking. Skype is a great way to keep in touch with family back home.
The cost of living isn't hugely different to the UK. Fuel is cheaper, but food shopping is comparable.
I hope that helped :)