I'm actually eastern European (Bulgarian) who currently lives and works in US. I'm obviously biased but I think living conditions in eastern Europe are great. The somewhat relaxed atmosphere of those countries is probably great at least while building prototypes.
Sprout Systems (the original one at sproutit.com, thank you very much, not the one Clustrix merged with) lived in Prague for ten months when developing Mailroom:
"The three of us met in school at Point Loma Nazarene University in San Diego. After graduation, we decided to launch a business together. Once we got to talking about our past experiences trying to find good software to run our small businesses, we knew what we had to do.
"Since then, the three of us actually moved to Prague, Czech Republic to help launch our business. This is the internet after allXwe can be anywhere. We thought: why not some place that is both exciting and 40% cheaper than California? We will only be here for 10 months or so, but it has made this startup unforgettable!"