  We have performed time-dependent numerical simulations of the interstellar
medium (ISM) which account for galactic shear and magnetic fields, vertical
gravity, and a radiative cooling function for atomic gas. This allows us to
study the magnetorotational instability (MRI) in cloudy, vertically-stratified
disks. As in previous unstratified models, we find that thermal instability
interacts with MRI-driven turbulence and galactic shear to produce a network of
cold, dense, filamentary clouds embedded in a warm diffuse ambient medium. This
structure strongly resembles the morphology of HI gas observed in the 21 cm
line. There is significant thermally-unstable gas, but the density and
temperature distributions retain the twin peaks of the classical two-phase ISM.
We analyze the vertical distributions of density and various pressure terms,
and address what supports the ISM vertically. Turbulent velocities of the cold
gas increase as the cold mass fraction decreases, but are generally low ~1-3
km/s near the midplane; they increase to > 5 km/s at high z. Finally, we argue
that in the outer parts of galactic disks, MRI is likely able to prevent the
development of self-gravitating instabilities and hence suppress star
formation, even if cold gas is present.
