Is there a dialect in toulouse?

Yes, occitan is spoken by some in the south of France but it is considered a language rather than a dialect:

http://www.en.wikipedia.org/wiki/Occitan...

I don't know how prevalent it is in Toulouse though but they do have bilingual street signs.

There were five languages in France before French became the official one, and numerous dialects coming from them. In the south it was Occitan as said above. It can now be learned in school but it is not used much. In Toulouse people usually speak French with a local accent and some occitan words sprinkled here and there.

Some occitan words :

cantou - the chimney
po - bread
coutsou - pig
ventreche - bacon (belly)
chabro - mix red wine and soup mmmmmmmmm
o moun - on top - uphill
lo pech - mount
lo feno - the woman
esquizza - to tear
chova - hot
fr猫 - cold
lo tz眉r - the day


some proverbs : quan lo cato so pensenio chigne do visit o novela - when the cat cleans his fur this announces a letter or a visit -
per nodal lou ts眉r ovantza d'眉n p茅 d茅 gal
at christmas days are a bit longer : one hen step

pluie de mars pisse de renard ( forgot the occitan for it ) means "march rain is nothing but foxe's piss"
rain in march is useless ( for tillages )

People speak french in Toulouse. Nobody talks occitan anymore.