I commute from SF to Palo Alto every day and I completely understand the desire to live in an urban environment. Yes, Mountain View is nice but it just doesn't have the same energy (or the same restaurants) as SF. There's something to be said for being able to walk down to Delfina, Nopa or Zuni for dinner on a Tuesday night.

Even if you have a door-to-door shuttle, I would STRONGLY recommend living in a neighborhood with close freeway access. Getting from certain neighborhoods (such as the Marina, Pac Heights, the Richmond, Russian Hill, etc.) can add 30 minutes or more to your already long commute. I would suggest Noe Valley, parts of the Mission, Duboce Triangle, Lower Haight, Hayes Valley and, to a lesser extent (due to slightly more difficult freeway access), the Castro. South Beach is also good, though probably out of your price range. I live in Lower Haight and love the urban grittiness of the neighborhood, though crime is a concern for some. The only way to know whether a neighborhood will work for you is to come out here and spend some time walking around.