Cheap places (and, as compared to NYC, very relaxed landlords with very easy sublet requirements) are mostly found in the East Bay. I live in Berkeley - compared to NYC and SF it is cheap and very close to downtown SF where you'll be spending most of your time networking anyway.
As far as I can tell, hiring techies here is just as bad as it is in NYC, so don't come here thinking all the programmers will line up to work for you.