Wow, Mission Delores is a great area, with amazing restaurants, Delores Park and the Castro on the western end and easy access to most other points in SF.
As far as living there goes, I would say that a lot depends on what you are looking for. The epicenter of the action is at 16th Street and Valencia--with 16th St. having a ton of restaurants, and Valencia having bookstores and al the rest. 16th street is also where the BART station is located so if you have a commute to the East Bay or into the city, this might be a little bit of a consideration.
I would say that if you want to be right in the middle of the action, you go for one of the apartments over the stores on Valencia itself. If you prefer to be a block or two away you go for Dolores Street (which I think is the most attractive street in Mission Dolores or on one of the little alley like streets that you find throughout Mission Dolores--like Linda or Lapidge. Guerrero isn't too bad either.
There are two negative factors to consider about Mission Dolores, however:
1. Crime: Mission does have one of the higher crime rates in SF, so expect car break-ins and that sort of thing. And you should also be careful about your comings and goings. Use common sense; don't put yourself in bad situations.
2. Pretty Expensive: Though the Mission is known for having slightly more affordable rents, this is less true of Mission Dolores. A two bedroom here can run you over $2500 (I've seen some for $4000 lately) and even a studio goes for $1300 and up. So it is pretty expensive.
If you want a slightly quieter nearby spot, btw, you might trie Potrero Hill to the east or maybe even Bernal Heights to the south, both are just as expensive but a touch safer, imo.
Hope that helps.
