I would not completely discount the Tracy area.
Tracy has its good and bad parts, just like most cities. The Lammersville School District, which serves Mountain House and unincorporated western Tracy, and Jefferson School District, which serves southern Tracy, are good, with Lammersville having schools that rank the highest in San Joaquin County and are on par with schools in Dublin, Castro Valley, and Livermore. It is Tracy Unified, which serves only a portion of the city, that is "scary" by many of the posters, even within Tracy Unified there are good and bad schools. If a person considers the Tracy school system to be "scary", then Dublin, Livermore, won't his or her cup of tea, either.
You should also ask people who actually live in the Tracy area what they think of the commute and the quality of the schools to get a second opinion. I don't live in the Tracy area, but I know for a fact that the recent installation of metering lights, the construction of HOV lanes, and the exodus of some commuters back to the Bay as a result of foreclosures in Stockton have had or will have an impact in thinning the traffic over the Altamont Pass. Looking at Google Maps - Traffic as of this post, which is evening rush hour, the heaviest traffic is concentrated in the Tri-Valley and thins out at the Altamont Pass. (More information about Tracy-area transit options below picture)
If you don't want to drive to Pleasanton for work, you can take the Tri-Delta Transit commuter bus from Mountain House, or a choice between the bus and the ACE train from Tracy.
I do admit that there are some parts of the Tracy area that I would not live in if I had children, but there are also parts, such as Mountain House and southern Tracy, that I would prefer over some parts of the Tri-Valley.