[texhax] \url has no effect.

[Karl Berry]

    It looks like hyperref conflicts with url. 

No, it does not.  It's not necessary to load url with hyperref (hyperref
defines \url, so url essentially becomes a no-op), but it works fine.
I've seen many documents that load both.

    > I have ugly long links 

Add  breaklinks  to your \hypersetup call, and use pdflatex.
(There are various other methods, but that is simplest.)

Hope this helps,
karl