I was pretty sure about moving to San Francisco city when I moved to Mountain View last October. Ultimately it happened in last week of March.
The main concern was definitely the commute to South Bay every day for work which was meant to be about 2 hrs per day compared to the local commute of 30-40 minutes(biking). It turns out the commute really isn't an issue now. I have never had to stay back later than the last shuttle from Mountain view and only once had I taken the last shuttle and the overall time for commute is usually around 100 minutes and most of it is used properly either for extra sleep or reading books :)
Now to the advantages of living in the city, well life is as different as it can get between San Francisco and Mountain View. In MV very often we wondered about what to do and most of the time it meant coming to SF or relaxing at home. In SF every weekend is just loads of fun, so many things going around that you would sometimes pass the opportunity of a weekend road trip with Friends from South Bay.
An example of what been happening here since I moved(~6 weekends) include Japan town Cherry Blossom Festival, How weird Festival (last week), Bay to Breakers(today). Besides whole lot of dancing classes and parties including Friday evenings dancing at Il Pirata or in Oakland learning Rueda, Saturday evening Casino(Rueda) dancing classes followed by social dancing in Bollyhood cafe from 3-8 pm followed by Lindy hop and Blues lessons and dancing in ODC dancing studio.
When you can figure out time when nothing of your interest is happening there are tons of parks and trails around to visit, my favourite has been Golden Gate Bridge cycling route and Golden Gate Park. Another very interesting thing that has been happening is the Friday morning SF2G rides I have been taking part in almost every week.