A couple of kids later, I live in the East Bay and with casual carpool to the City, the commute's a breeze; at this point, I would only consider a job on the Peninsula (or, God forbid, the South Bay) if there were no alternative in the City. And to be honest, if I were looking for space now, I might give Oakland a serious look: with the expansion of Silicon Valley into San Francisco, Oakland is no longer the remote outpost it was -- and rents are cheap cheap cheap...
Alameda or Jack London Square, and you can hop on a ferry.
BART gives you 5-15 minute headways from 5am until midnight/1 am, and is very, very reliable except when it isn't. Ferry service is less frequent but generally a nicer ride (more room, less riff-raff, much less scary crap in the upholstery, literally).
If you're ever near the Oakland Tribune Tower, ping me and I'll buy coffee/beer.
Singles enjoy the city life and those with families get more value in the East Bay with SF just being a BART ride away.