Liza, as the others have mentioned, the picture IS indeed Civita di Bagnoregio. It's a very unique and interesting place to visit! While it's easy to tour the entire town in about 20 minutes, it's a good idea to stay a longer in order to appreciate the history (Etruscan,etc.) and of course enjoy a great meal at Antico Forno (which is also a B&B) or one of the other fine restaurants.
It appears that some of the homes in the village are being bought and renovated for "weekend use" by people from the large cities. Some of the renovations that I saw were really nice!
If an older lady offers the chance to have a look at the view from her back yard, note that a "donation" will be expected. The view is a good photo op, and I didn't mind a small token for her. She doesn't speak much (any?) english though.
If you need further information on the travel route to Civita, check Rick's Italy book or post another question here.
Happy travels!