Santa Cruz is another option, though I'm biased since I live here and like it. ;-) It's actually closer than most of the rest of the livable options if you work in the Cupertino/San Jose/Santa Clara area. You do have to get used to driving Hwy-17, but on a good day it's 35 mins driving, or 60 mins on the Hwy-17 bus (which has free wifi), versus 60-90 min driving to get to San Jose from Oakland or SF. And there's beach.
