For those interested in SFU, I'm finishing up undergrad having lived downtown (actually, the West End) for my entire degree. Here's my experience in that regard.
Pros:
1. The commute has been hassle-free (if not short). I get on the bus to SFU from downtown and am guaranteed a seat, while most people getting on in Burnaby have to stand if it's peak hours. Ditto with skytrain. If my class is downtown, well, that's really simple.
2. Nowhere else in Vancouver beats downtown if you're living without a car. You really don't feel inhibited relying on transit and walking when you live downtown, whether it's daily needs, eating out, going to the park - whatever.
Cons:
1. A 1-hour commute to school is not short. The fact that I have always read or done homework on the bus (because I had a seat) mitigated that somewhat, but it's still a long haul and I could understand some people not being able to get used to it.
2. Housing cost. My 1 bedroom place (shared with my S.O.) is $950, and that's an absolute steal. If you're rooming with a stranger you'd need a 2 bedroom place, and it's unlikely you'd find anything downtown for less than $1400.