The best place to lose your wallet in the bay area! Odds are at least even it'll be returned with money inside.
Derided by some as a bland gray goo of wealth, Palo Alto has plenty of upside. The main urban center (University Ave) is home to an Apple store (when healthy, Steve Jobs is regularly spotted around town), two movie theaters, a bunch of shops and places to eat, and various startups they die or grow too big for PA. The Stanford campus is nearby and circles its own orbit.
California Ave is a smaller center of urban-like activity, and Facebook! (which was previously on University) - both neighborhoods are readily accessible via Caltrain.
A proto-nightlife is congealing in Palo Alto with a handful of bars. The Rose and Crown is a particularly good one :)
Website: http://www.cityofpaloalto.org/
Wikipedia: http://en.wikipedia.org/wiki/Palo_Alto,_California