San Francisco is a great place to live. A lively place with tons of culture. However it is expensive. Even the surround areas aren't cheap anymore.
San Diego is nice and feels small townish, again pricey but it might be a nice happy-medium.
For a truly smaller town, community oriented area try Santa Cruz or Monterrey. Santa Cruz is a little more hip, Monterrey a little more sophisticated, both are close to each other have have similar things to offer.
I've lived in SF, Monterey and Los Angeles (Santa Monica).