In reply to rebelgtp:
To get a good idea on housing costs in the Bay Area, check out Craig's List. Prices will vary a lot depending on the specific neighborhood, and how much time you're willing to put into your commute. As long as you're flexible you'll be able to find somewhere to call home. I'm sure a few of us on here can point you toward more specifics if you give us some things on your 'must have' list. Eg., renting or buying, garage or off street parking, pets, children, maximum time spent commuting..
In terms of things to do in the area, I can't imagine an area with a wider variety of things to do.
For day trips:
If you head south you have Monterey and Carmel, as well as Pebble Beach and Laguna Seca. Big Sur has some great hiking and camping, and that stretch of Highway 1 is one of the greatest cruising roads in the world.
Just around the corner from Mt. View you get Santa Cruz, a great beach town and some decent hippy culture. There are a bunch of places to check out the Red Woods, or ocean life. That stretch of coast has some great little towns to explore, and Skyline and Hwy. 9 are a local meca for all things with engines in them.
San Jose can be fun on it's own, but is often eclipsed by San Francisco.. and with good reason. S.F. is a great place to visit (although I wouldn't want to live there).
If you head north you have Muir Woods, Berkeley, Napa, the Mendocino coast...
For weekend trips you can add in the Sierra Nevadas, Yosemite, a few great rivers, trips south to LA, pretty cheap weekend packages to Las Vegas or Reno...
The high cost of housing is also at least partly offset by very low heat and AC bills. I shocked my family when I told them how much I was paying for an apartment when I first moved out here from New England .. and then I asked them how much their rent plus heating bill was for a single month, and it turned out I was paying less...