Depends on whether or not you have a car. You won't be able to survive out in the suburbs, but you'll be fine in SF proper. If you have a car for free, then go for the suburbs, but if you have to buy one then the "savings" you get from living in the middle of nowhere might not be very high.
I visited Mountain View yesterday, and it was one of the most depressing places I have ever seen. It's the suburbs, but as expensive as a big city.
Find a place near Castro street in MV, and you will be in walking distance of pretty much anything you'd need. As an added bonus you can walk to the train station and can easily travel up or down the peninsula on Caltrain or VTA light rail.
What exactly would you take VTA light rail to? It takes about an hour to get to the commercial district of San Jose from MV; probably faster to take Caltrain and walk on the other side, or even take an express bus. And the area in between MV and San Jose on the route has basically nothing; snakes through a bunch of middle-of-nowhere residential areas north of 101. Well, along Tasman there's the Rabbit's Foot meadery hiding in a nondescript office park, but that's about the only thing I can think of on the whole route along Tasman or 1st.
You must have really high standards for "not depressing" is Mtn. View is one of the most depressing places you've ever seen. Have you ever, perchance, been anywhere in the state of Washington?
I visited Mountain View yesterday, and it was one of the most depressing places I have ever seen. It's the suburbs, but as expensive as a big city.