Ah, didn't realize you needed to be that close to Silicon Valley. Some other people have mentioned downtown Mountain View around Castro Street (try Dana Street Cafe) which is pretty cool and close to a lot of software and hardware shops. There are some nice places in downtown Palo Alto but I don't know the prices there anymore. Back up near SF you may want to look at the Mission district, specifically between Valencia and Dolores south of 16th Street. It's a transitional neighborhood, great food, lots of walking distance small shops, but you may find your car broken into if you leave anything inside.

We are paying $3000/month for a nice old 3bdrm Craftsman in Rockridge that is about 5min walking from the BART station and about 2min from the College Ave strip.