We just moved to Toronto 4 months back and I went through the same dilemma as you have. At the end, we decided that it's better if we take up a residence nearby to where you work since we can reduce the hassle involved in travelling. At the moment, I only live 15 minutes away from my office (which incidentally is in North York) but I have no regrets - it's a great place and I am home in 15 minutes . Further, it's very well connected for public transportation. I haven't got a car as yet but there is no burning desire to own a car either. I take the bus to the office in the morning and walk back home in the evening - good physical exericse!
So, I guess it's more of a personal preference and convenience really - As for schools I have got no idea since my daughter is still 2 years away to school.
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