Margaret Hale has been raised as the 'companion' to a richer and prettier cousin but has an independent mind and inner compass. Shortly after her return to her family, her father, a country vicar, has to give up his post because of his religious doubts, and the family moves from rural southern England to Manchester (renamed Milton-Northern) where he will support the family as a private tutor. Once settled, Margaret begins to adapt to her surroundings and sees that class structures are beginning to change. John Thornton, the mill owner, is not a gentleman in the sense of being a self-supporting member of the gentry, but he's financially well off. The Hales, in contrast, were at least on the fringes of Society but in Milton Northern, their low income puts them down a few rungs on the social ladder. This leads to a number of misunderstandings between Margaret and John and their families of the sort that would fuel the plot of 1930s screwball comedies but here come across just seriously enough to retain the slightly medicinal flavor of a Victorian lesson.
The working class characters aren't quite as fully drawn. Shortly after moving to Milton Northern, Margaret meets Bessy Higgins, a young woman dying from industrial asthma and probably TB, and her father Nicholas. Bessy is a stereotypical young victim - saintly, and despairing over her father's atheism. Nicholas is a bit more complex - he's one of the leaders of a nascent labor movement which Gaskell views with favor - but he still borders on cartoon. The Higgins's neighbors are crude and uneducated, and the strikebreakers are nothing more than faceless, superstitious, Irish thugs.
I generally enjoyed North and South. Margaret is an interesting character who grows over the course of the novel, and the plots tie together neatly but not too neatly. I found the ending to be a bit rushed, and a bit too neat, although that is due at least in part to Gaskell's publisher truncating the final third of the novel.
I may have to read this one. I took a course on Victorian Melodrama during my (very short) stint in grad school. I think your description of the literature at the time is pretty spot on.
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