This is a frustration for me currently. My work is taking me closer to Palo Alto and San Francisco, her work is taking her closer to South San Jose. Our most recent change is that she is working on finishing a project in Los Gatos, while I just found some great work in Palo Alto.
We have compromised by living in the middle, but we both need to commute for about 30-40 minutes to our respective work places. I view this as an investment in our future. Right now we are both building careers which will make us much more money in the long run than the cost of commuting.
The thing about commuting by bike/transit in the Bay Area is that it is doable, largely because there is critical mass with regards to enough people doing it that the facilities exist. In many cities, you cannot bring a bike onto a rush hour train. Here? 2 bike cars per train, packed to capacity. This summer, I was commuting from SF to Stanford. 10-minute bike ride on one end, 5-minute bike ride on the other end, 37 minute train ride in the middle. Got plenty of reading/homework done and a bit of exercise.
He's talking about Caltrain. If you can do pure Caltrain + cycle it will be faster than driving during rush hour, often significantly so, except on the one day a month that someone is killed, on those days you're fucked but at least you have a good excuse.