We've stayed both south of town and in town the many times we rented over the years. W've had friends stay north of the cut. The main difference I can see is the remoteness of being North as was already mentioned. Depends on what you want out of your stay. We always liked to go back & forth from town at least once a day on our own schedule. It is easy on the South with a golfcart or taxi. The North is very beautiful and for the most part, quieter, but more trouble to go to town.
Bugs are rarely bad on the beachfront unless the wind dies down.
AmbergrisCaye.com 
