I've lived in Santa Clara and Sunnyvale, both quite near the google campuses in Mountain View. The cheapest place I lived was a 2 bedroom above the Lawrence expressway train station in Santa Clara. It was the "bad part of town" by the standards of Santa Clara, but I never felt afraid for myself or my belongings. $1200 a month for the 2 bedroom. The apartment was kindof falling apart, though.
after that, I rented a duplex (a house with a garage that was attached to the garage of another house) for $1500 a month in a reasonably nice part of Sunnyvale. Walking distance to downtown. 2 bedrooms and a garage. Again, the place was old and not particularly well-constructed. It was reasonably maintained and the cosmetics were dealt with, though.
I'm currently in a 2 bedroom apartment, also in sunnyvale, that is very well constructed (good sound insulation, sprinklers, built within the last 20 years) it's walking distance to the AMD building and Fry's. It's around $1750 a month.
All of these places are between 10 and 30 minutes from google, depending on the traffic.
The south bay is quite a bit cheaper and, uh, more 'suburban' than the city. the thing to watch for is that this place was built as a suburb; e.g. most of the construction is done pretty poorly, and much of it is old. We need to knock down some of the old tract homes and build some high rises, but we won't. Of all the places I've lived around here, this apartment is the first one with properly earthed power.
Really, all of Mountain View, Sunnyvale, and Santa Clara is pretty safe. Parts of San Jose can get a little bit more dicey but is still quite a bit better than the city as far as getting your windows broken for a GPS. If you head north of google, so long as you stay out of east palo alto, you are fine, crime-wise, but it's all pretty expensive (except, of course, east palo alto)
Of course, this all depends on your standards. I drive a car that isn't worth much more than a month of my rent; if you have BMW tastes, you are going to have to pay more.