I grew up in the Chicago suburbs and lived in both Oak Park and Forest Park. While my husband and I loved living so close to Chicago, we really wanted a change. I found a job teaching, and we moved to Redwood City, CA. It's about 30 mins. south of SF. If you're looking for a cool, hip lifestyle, SF is probably going to be your best choice. The cost of living out here in the Bay Area is pretty expensive all around. If you don't mind living in the 'burbs and heading into the city for fun, then Redwood City, San Mateo, etc. are all great choices. I love the climate on the peninsula...definitely a HUGE change from Chicago!
South San Francisco isn't that bad, neither is Oakland. It kind of depends on what you guys are looking for in terms of jobs, commuting, and whatnot. My husband works in Pleasanton and commutes everyday from Redwood City. Compared to Chicago, the commute is a breeze! It can get pretty nasty when the there are problems on the bridges, but it's definitely do-able.
Either way, I love living out here and I'm so glad we moved to CA. There is SO much to do. If you guys like the outdoors, then you'll love Northern CA. Plus, if you're into music, SF gets great bands in some super awesome clubs...
Best of luck!