Clarendon is probably the most happening place in Arlington right now, but it's really expensive. A friend from Wake (naive, rich girl) just signed for a $2100 studio right near the Metro there. Silly girl, that price is not typical, but an example of how bad it can get. But Clarendon has really grown as a place to go out since I've been here, and sadly several places charge cover there now.
Ballston is a little further out, but a cheaper place to live. You can also find cheaper places in the Courthouse/Clarendon area if you're willing to walk 20 mins or so to the Metro.
Finding other people to live with in row houses makes it cheaper, especially in the city. I want to live somewhere in the Columbia Heights/Mt. Pleasant/U St./Adams Morgan broad area when I move.
I currently live in Van Ness, which is alright, close to the Metro and Cleveland Park, which has some solid bars. The Metro takes me to places to go out pretty easily. Plus its close to where I work in Friendship Heights.
There are a ton of different choices really, and it all depends on how much you value closeness to the Metro, closeness to work, closeness to happy hour, and general neighborhood feel.