Capitol Hill is a pretty great place to live too. Rents can be expensive but it's not impossible to find deals here and there. Cap Hill is perfectly situated between downtown and the U-District. It's a pretty young, dense, vibrant district that caters to many types of people. There are tons of places to eat, endless things to do and the bus access is excellent. If you like people watching then Cal Anderson Park is a wonderful place to sit down and chill (especially on sunny days when they come!) Volunteer Park is a gem as well, a nice place to have a quiet walk and/or visit the Conservatory or Asian Art Museum. The 43 and 49 both run frequently to downtown and the U-District. Fremont and Wallingford would also be good choices too as other posters have mentioned. Ballard seems a little out of the ways, but thats just my opinion.