Since I was in central and northern India, I can't comment on those cities specifically. The Slate article is a bit exaggerated, but a lot of it ring true. The haggling is true, everything is negotiable. I am not a 'haggler' per se, but occasionally asked to get discounts and pretty easily got 10% - 30% off. I kind of saw it as, this guy needs the extra $2 more then I do. Pretty small price to make the guys day (or week).
Mumbai is huge though, and if you go there, watch for theft. Petty crime is high there. It's also a very humid city, being right on the Arabian Sea. The lush city in India is Bangalore (so I've been told). It's higher in elevation, thus a little cooler. Plus, it's more developed as it's been a tech center for quite a while. I'd love to go there.
I say go! If you have the means, its definitely worth the time.
Jason