Please help! I need advice from other old house owners, preferably in the South, who can speak to heating with a gas furnace or heat pump.

I've posted on the HVAC forum and received some helpful responses about specific quotes I've received. But, just like in person, I am getting very conflicting opinions about the best form of heat for my area. I'll post the thread link below, in case anyone wants the back story, but I'll repeat the pertinent facts here.

My husband and I bought a 1925 brick bungalow farmhouse in northern Alabama seven months ago. It's very much a fixer-upper, but we love the bones of the house, and we have restored a 1914 bungalow elsewhere before. We have lived through a hot, humid summer and a rather mild winter here now with just window AC and propane wall heaters. We are planning to put in central heat and air this spring, so I have been getting several quotes. Via load calculations, most everyone agrees on sizing (3.5 ton system for downstairs and a 2 ton upstairs). We have access to natural gas at the street (utility company will run the line and set the meter for about $50) and we have a 200 amp panel with four double pole breaker spaces available, so we should be able to go any way we want.

Every person I have spoken to recommends something a bit different. We have to go with split systems for downstairs and down, which means the basement air handler must be hung horizontally due to our space issues. If using a gas furnace, it must be at least 90% efficient for horizontal venting reasons. One guy said we didn't have enough breakers for two heat pumps and the necessary axillary strips, but everyone else (and an electrician) seem to think we're fine if we want all electric.

We have 10 ft ceilings downstairs, single pane weighted sash windows, lath and plaster walls with no insulation, and blown-in insulation between the floors and in the knee walls upstairs with some R-13 fiberglass on a few walls up there. There is no insulation on the roof or in the rafter bays yet, but we are planning an upstairs renovation and will be adding some. A few guys think we will be unhappy with a heat pump for downstairs and strongly recommend we go with gas or dual fuel for both winter comfort and cost efficiency. Several others have said heat pumps would be fine and cheaper to run.

The upstairs decision is fairly straight forward (just what SEER rating we want, what upgrades we can afford, etc.), but I'm so confused about the downstairs system. We don't want to spend all these thousands of dollars and be disappointed about overall warmth and comfort, as well as operating costs. I've always had gas heat downstairs, but our last house had a heat pump upstairs which did fine (but it was much newer, tighter, and well insulated).

Please, please, if anyone lives (or has lived) in the South in a leaky old house with some form of central heat and air, can you share your experience and wisdom? Is a heat pump for the first floor enough down here? Is gas nicer and more comfortable because of the ready heat? Did the heat pump have huge electric bills during a cold snap? Did the gas dry out your woodwork? Is a dual fuel (or hybrid) unit the way to go for the best of both worlds, or is it overkill in the South? We've heard all these claims and more and I don't know what to believe!

Our lovely old house:

Here is a link that might be useful: HVAC forum post about my house