On the subject of cost of living:
Buying daily necessities is cheap, as is going out for a meal if you keep off the booze. Going out for a night in town, especially the posh clubs on the Bosphorus, is very expensive - around 30-50 Euro for a drink.
Cars are very expensive in Turkey, unless you buy something produced locally - Ford, Renault and Toyota all have factories churning out boring little 3-boxes in large numbers. Don't expect being able to afford a Range Rooney; those things will set you back 200K USD easily (yes, really expensive stuff like cars is often priced in Dollars). Fuel is around 3.5 Lira/litre.
As for housing, well, what are you looking for is the key word as is, of course, location. You will probably, for security reasons, wish to live in a gated compound of some sort. There are several on the European side, some 20-40 KM from downtonwn and the airport. If you're looking for a comfortable 3 bedroom house, expect in the vicinity of 2-3000 USD a month, unfurnished but incl. water, gas, electricity etc. Add a pool and you're looking at around 3-4000.
An apartment, with security, of around 100 sqm with 2 bedrooms in a nice area is around 1000-2000 USD, mainly depending on age of residence and location.
Living on the Asia side can be quite a bit cheaper, up to 50%, but then you'll have to negotiate the traffic across the bridges, or que for an hour-ish to catch a ferry. Say you live 5-10 km on the Asia side, you'll easily be looking at a 2-3 hour commute each way to the airport. Traffic is quite horrendous in Istanbul, and not made any better by the locals' disregard for traffic rules and rather poor, if not near non-existent, driving skills. Getting to the airport from the near-outskirts on the European side can also be quite a hassle, especially in rush hour, but it's not as bad as coming from the Asian side. Public transport is, more or less, a joke. Yes, there are plenty of busses around, but you wouldn't want to set foot in one of those. There's a tram system, but it doesn't connect the airport and basically only serves the downtown area.
If you fancy living on the Bosphorus, better have a significant other pulling 3 times the quoted Captains salary.