I had heard of "dense sprawl" and "density without walkability" in the past, but before spending a week in Jerusalem last month, I had never really lived through these problems.
My parents (who I was staying with) rented a unit in a high-rise condo complex called Holyland Tower. Although Holyland Tower was the tallest building in the area, there were numerous mid-rise buildings, and lots of two-and three-story apartment and condo buildings. While walking through the idea, I saw nothing resembling a single-family home. In sum, this area was a pretty dense neighborhood in a pretty dense city (Jerusalem's overall density is roughly comparable to that of the city of San Francisco).
But although the density supported walking, the design did not. To find the area, go to Google Maps (maps.google.com) and go to a street called Avraham Perrera. You will note that the street is in a section of looped streets that make the typical American cul-de-sac seem like a masterpiece of clarity. As a result, very little of interest is within walking distance, and what is within walking distance is hard to find unless you know the area really, really, really well.
For example, the nearest restaurant is less than ¼ of a mile away as the crow flies, but is about two miles away in reality. To get there, you have to go on five separate streets. (To try it yourself, go to Google Maps and ask for directions from Avraham Perrera to 5 Hose San Martin).
Because the succession of street loops is so confusing, even places that are actually not very far are hard to find. For example, after I was in Jerusalem for a week I discovered that there was in fact a small supermarket a ten or fifteen minute walk away, but because of the messy street design (and admittedly, the rough terrain as well) we were unaware of its existence. By contrast, in a neighborhood with enough of a grid to distinguish commercial from residential streets, commercial destinations are easy to find. Admittedly, grids are more difficult on hilly terrain such as that of Jerusalem. But some American neighborhoods manage to combine walkability and hilly terrain- for example, most of San Francisco, as well as Philadelphia's Manayunk.
So what my Jerusalem neighborhood taught me was that with sufficiently poor street design, even a fairly compact neighborhood may be more confusing to navigate, and separate uses more aggressively, than some sprawling suburbs.