I just found housing in Monterey Hills.
If you have no idea where to start, you should start looking ~10 min away from campus. You want to get a mix of safety but decent pricing. Some cities to look at: Pasadena, Monterey Hills, Arcadia, and surrounding areas.
I personally just found a really nice condo place ~8 min from Health Science Campus in Monterey Hills. It's a newly renovated complex in a decent area - pretty good prices. 4 of us are getting a garage, 1700 sq ft , 3 bedroom , 2 story, 2 bath, place for $2200.
I just started a usc message board today (my undergrad school had one and it proved to be quite useful) : http://www.trojanforums.com/