I can kindof see both points of view here (It's not obvious from my user name, but I'm Spurs).
The reality is, Spurs fans of old have seen success and expect it more than we should, giving us a bad rep. We're not as bad as we used to be, having been through our awful patch in the 90s and first half of the last decade. However, City had a bad spell too and they had their relegations and things, so you have to concede, given the difference between City now and pre Sheikh/Thai billions, the rise seems a little more artificial than it does for Spurs, who have been squad-building for about 6 years, buying mainly British youngsters. Modric for example was unproven, which is why he came to us and van der Vaart a Real Madrid cast off we got for a bargain.
Be in no doubt though, although we might dislike the way City appear to be buying success in a way Spurs are not, to a man Spurs fans will accept City have a better squad and we will not begrudge you any trophies you win with what appears to be a stunning team, playing some great football (which is much better than last year, when Mancini was way too defensive).
So yeah, I can appreciate that you might dislike Spurs fans for their slightly holier than thou attitude, but you'd be the same if you'd done it all within the FFP rules. When I met with Daniel Levy earlier this year, he told me he believed Spurs were the only PL side that met these rules. Now I don't know if that is true, but you have to admit that for us to have reached where we are without spending on transfer fees and wages over and above beyond what we can generate naturally, is quite impressive. United and Chelsea can't claim to have done the same, Arsenal are probably the other side who are closest to it.
Back to the point in hand. I think we're closer to being title challengers than we have been since at least 87, possibly earlier. I don't think we can win it though. There is the mental barrier... United, despite having a side of similar strength to us have Fergie and other teams put them on a pedestal because of the name and recent history, that will still help them. But, if it wasn't for Chelsea's money and City's recent emergence, I really do think that we'd be serious contenders. What if's don't mean anything though and we do live in a world where the Manchester clubs are becoming the 'big two' out of about 6 or 7 clubs who can compete for the top 4. Which is probably better than the guaranteed top 4 we had 4 or 5 years ago.
I've gone off topic again. It's fair to say that if it's true that 'Arry's approach is motivation over tactical nous then we could well be exposed at some stage. But he does do something our previous managers seemed unable to do. He plays players in their natural roles and tells them to play the way they know best, then if it doesn't work he finds a player who does. Parker being a case in point, he identified what he needed to make the whole team tick and made it happen.
My feeling is that we will finish 3rd after competing for much of the season. I think we bear comparison with Keegan's mid 90s Newcastle side and that with a couple of injuries we'll lose just enough games to lose touch with City. Between City and United, I wouldn't like to speculate on who will win, but it will be one of those. Finishing above Arsenal and Chelsea will be a good acheivement for us, anthing higher (i.e. 2nd) would be mindblowing. I think we can win the league and have the side capable of doing it, but I don't think we will. I'm just happy to settle for finally being taken seriously!