ML & Theo, I am prety sure that Chlorine is currently used by almost all municipalities to treat domestic water. I am guessing that cities who use wells as a source water probably have to use very little chlorine for purification. THE MAIN DIFFERENCE BETWEEN THE MUNICIPALITIES and Canepole's example are the amount of dissolved and or suspended organics in the treament water. The more organics present in the treatment water the more trihalomehtanes that are produced. A majority of the organics are REMOVED before municipal chlorination for purification thus domestic water supplies will usually have very, very low, if any trihalomethanes. However some trihalomethanaes are produced. EPA now requires public domestic water producers to monitor for chemicals in the trihalomethane family. The municipality that serves me water violated the EPA trihalomethane limits a couple times in 2005. Some cities are installing filters to remove the trihalomethanes.
A somewhat bigger problem is the chlorination of sewage water before it is discharged into receiving streams. That issue is also a current concern for EPA.