Cabaret

Berlin:
The influence of the Nazis and the depression created tensions in Berlin, where the good environment would have otherwise been fairly "normal."
I'm not really sure what I was expecting, but my first impression form the movie was that Berlin was a fairly decent place to live. However, the dialogue from the characters described how "everybody" was broke, and placed much blame on the Nazis. In the background for some shots were also a crippled man (with his wheel chair outfitted with a Nazi flag), and political posters that had been defaced (probably by Nazis).

Nazis:
The presence of Nazis in Berlin made it a worse place to live, but in a time of hardship their promises were welcome.
The Nazis were seen as a negative influence in the movie, when the manager threw them out of the cabaret. We saw them beat up the manager, and Max described using them only for getting rid of communists, and then controlling them. Towards the end of the movie we see support for them growing, in the beer gardens where all of the young people get up and sing along with the Nazis.

Cabaret:
The cabaret is both a parallel to the real world and an escape from it.
The cabaret often mirrored what was actually happening in the outside world. The cabaret served as a medium to portray the world in a more light-hearted manner.