If you are willing to be flexible in terms on location, you can get cheaper rents but still be close to the city proper via public transit. Places down in the peninsula will be even cheaper, but you will have to factor in the price of the commute (caltrain from mountain view to SF everyday can get expensive). There are also the google shuttles, but I have not used them.

Living with room-mates will also save you a bunch of money obviously. I am down in Palo Alto right now but thinking about moving up to SF, so long as I can convince the people I want to live with to find a place cheap enough for me. Good luck!