I would like to stay around my area. Does the tier stuff really matter? I just don't understand why UT would be so much better than Miss. Someone even told me that if i plan on living in Tn, that UT is even better than Vandy. I don't get it.
Law school is very regional. Generally, firms only hire grads that they are familiar with or if their educations speak for itself (only about the top 14 to 25). So in Tennessee, UT grads are interviewed by UT grads and many of the associates are UT grads, thus, your odds of getting hired are significantly higher than in Minnesota where no one's met a UT grad.
Rankings matter, but only to a point. There's the infamous T14 and T25. After that, portability outside of the region is slim. So tiers do not matter - only how the school fairs with inside its own region. For instance, it could be argued that Ole Miss (Iier 3) can offer better job prospects than American (Tier 1) because Ole Miss is the only school that matters within its region (all of Mississippi, Memphis, and a little bit of Alabama). But American grads must compete with G'Town, GW, UVa, George Mason, all the of the T14 students who want DC. Thus they tend to struggle and must pick up the scraps.
Now saying that UT grads will do better than a Vandy grad is an argument which is difficult to substantiate. I think his logic is this: Tennessee firms only want to train an assoiate that they believe will be likely to remain in the area opposed to running to NYC at one's first opportunity. So, if someone goes to the regional UT, there's a perception they will be more likely to wish to remain in the area. Since you're from Tennessee, this is of no concern to you. Go to Vandy if you get in.
So in short, you're looking at Ole Miss and UT. Both schools do very well in their regions. If you want to stay in Tennessee, definitely take the in-state at UT. Moreover, only go to Ole Miss if you want to stay in Mississippi. Tiers don't matter, the extent of their regional reputations do. In your situation, UT is a no-brainer.