I'm about to finish up my undergrad at Lehigh, so I hope I can be of some help.
I wouldn't call South Bethlehem the safest place in the world, but just like anywhere else, with a some common sense, you can avoid almost any trouble. A vast majority of the crimes committed in the area are people stealing iPods out of cars or drunk kids getting assaulted at 2 AM. As a grad student, I don't think the later will be an issue, so just make sure to take your GPS and iPod out of your car when you park it.
The campus life is what I'd guess your typical college school would be like, largely based on drinking. Greek life is rather big here, but there has been some backlash against it this year. The undergrad aren't exactly the most cultured people as a whole, but there are some pretty awesome people here and a lot of fantastic faculty. Zoellner does put on some good shows from time to time, and they do get decent speakers to come here. The Humanities Center used to be a great place to hang out, but it is dying.
As a whole, North and South, Bethlehem is a moderately progressive area. Main street on Northside down near Moravian's art campus is an awesome place to hang (I like Wired Cafe). I also recommend checking out the Wildflower on Southside if you're a more liberal person. There are plenty of great cafes, between Wired, Deja Brew, and Caffeine Cafe, if that is your thing.
For living, if you're going to be in the Southside, either go on the other side of Mountain, or stay close to campus. Try to West of Buchanan and East of 378. the northside, just over the river is a lot nicer, but also more expensive, and further away. If you want to live right off campus, it'll be more expensive (around 400 per month w/o utilities) and rather hard to get (UG's snatch them up over a year in advanced). Stay clear of renting from Faschnacht. A lot of grad students rent up around 6th or 7th street between Monclair and Carlton. Prices are good there, and you're close enough to campus that crime isn't a huge deal.
The area is very hilly, but I'd recommend getting a bike. The transportation between North and South side isn't great, but it is relatively flat around the river, so biking isn't a big deal. Also, you can get in some great cycling if you go way North (like 20 miles), or you go over or around the Mountain.
Hausdorf, by your handle, I presume you're going for Math. If you want some specific advice about the department, PM me.