A charming, if cramped place to live. And not as cheap as you might think. A boat in decent condition with a good mooring will cost you upwards of 250,000 euros. The city has some 2,400 houseboats spread out in several locations.
Jurjen Heeck's houseboat website has all you could possibly want to know about them.
Amsterdam also has a houseboat museum with the address 'opposite 296' - which is how houseboat addresses are written.