They only heard about the title of the film and thought Åmål would be presented in an extremely bad way
The sign that says 'welcome to Åmål' that you can see when the girls try to hitch-hike to Stockholm was constructed by the movie company, the town of Åmål wouldn't lend them one
When the film came out they were happy, they got a lot of PR through the film
Anyway, one of the reasons Moodysson chose Åmål I think was because the name sounds really unglamorous in Swedish
It's probably a pretty normal sleepy small town in the swedish countryside, no more no less


