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Why Lima? Although I was born there, there's a lot of other places in Peru I'd rather live. I'm torn between the beach and the jungle but the beach is in the lead right now. We're in Los Organos and had a cloudy day all day yesterday. That's the third in 10 months. I hope it doesn't keep up!

To work in Peru, you first need to obtain a Work Visa, otherwise you are illegal and could be deported or detained. The way we do it currently is we're on tourist visas and work online. My wife does medical transcription for a company in Michigan and I run three websites. That way, we do not get paid by anyone or any entity in Peru and, since we are tourists, logically don't even live here. It helps, though, living only a couple of hours from the border, so we cross to Ecuador every six months to renew our visas.

I am American and have been living in Lima for 2 years.  I am indeed an English teacher, but an actual certified English teacher.  If you are not certified, you can get jobs teaching English at English language institutes. You may be able to get a job in a school if you have contacts, but I honestly don't think that non-certified teachers should be teaching in classrooms where students are paying a lot of money to get their education.  Institutes will give you training, though usually unpaid.  It is really easy to get a job in an English language institute if you are a native English speaker...but they will usually require you to already have a work visa. 

Personally, the only place I would consider living in Peru outside of Lima is Arequipa.  But, that is just me.  I have a very nice lifestyle in Lima and Lima offers pretty much everything.  Is the weather the greatest?  Not in winter, but it's lovely in summer.  Is it loud and dirty?  Depending on where you are...but it is a huge city of around 11 million people, so I don't ever understand why people are surprised by that.  I have travelled around Peru quite a bit, and while most places are nice for a weekend, by the time Sunday rolls around I am ready set to be back in Lima. 

If you don't like big cities, don't live in Lima.  If you like tiny towns that may or may not have running water, electricity, phone lines, internet, etc, there are plenty of those.  I don't know what you would do in them though. 

Cajamarca, Trujillo, Cuzco, Arequipa... you could probably find a job doing something with English... they are all okay (IMHO).

Final note, be careful where you decide to live if you move to Lima or any of the other bigger cities.  There are good areas and bad areas... just like in any other country.