You have too many choices in Oregon. Portland is an excellent city to own a bike. There are many neighborhoods that allow for only walking for groceries, etc, and riding to work. I would recomend the east-side of portland for this kind of living.
If I had to choose one town for living this lisfestyle it would be Corvallis, with Ashland a close second. Both towns have a great central core, with great supporting neighborhood stores. They are beautiful, are progressive, open minded (both are college towns) and have great cycling paths. I lived in Corvallis for 4 years when I went to school there, and found it my favorate small town in Western Oregon.
Also, Corvallis and Portland are gold-rated as bike friendly communities (see link below). So if you want a small-ish town, Corvallis. A City, Portland (East side).