I agree with Humboldt, stay right around that neighborhood... the whole stretch along Middlefield & Central Expressway is fine, and has a TON of apartments to choose from. Only part that might be "less desirable" is right around Shoreline, Rengstorff and Escuela Way - even those aren't really
bad.
I know a few people who've lived in apartments near Mary Ave. & Evelyn (in Sunnyvale), which is a nice area. It's slightly cheaper than Mountain View, and has lots of newer complexes with modern amenities. Check out the Avalon communities, though they might be a bit above your range:
http://www.avaloncommunities.com/san-jose-apartments/ Also plenty of good listings on craigslist, as you already know! Btw, the commute from Sunnyvale (particularly west of El Camino) would be easy, since you can avoid the freeway by taking Central Exp. or Middlefield.
Mountain View itself is a great little town, and you should consider looking near Castro St. It's very cute, with some terrific restaurants and cool shops... that's the expensive part of town, of course.

Palo Alto gets even more expensive, but the drive would be easy if you're near Middlefield. Anyway, I'm sure any of these areas will be fine!