Gangrene,
I know everyone's budget is different, so Rule #1 is do what you can afford to do. That being said, you will want to live as close to campus as possible (even on-campus if you guys are ok with squeezing into a 2 bedroom).
The best way to find a place is to come here a few weeks early. First, go to Student Services. They have a book with current housing ads. This is how I found the home my family has lived in for 2.5 years (wife and son). For apartments, look at
www.forrent.com or another rental website. However, for about the same cost you can live in a house (apartments are expensive, for Phoenix, around here). We opted for a house because it was the same cost and we got our own pool and biweekly pool servicing.
I think it is a great idea to drive around the area. It will help you learn the area and learn what neighborhoods you want to live in. Call on signs. I would plan an entire day or two to do this. We had 2 other homes lined up this way before deciding on the one from the Student Services ad. You should expect to pay more for rent around campus... usually $1000-1200/month for a house and +/- $200 for an apartment.
On a tighter budget, Surprise is a good way to go. The homes are newer and the area is pretty nice. It is a good drive away, however. There are several "middle" solutions (price and distance). You'll have to drive around but I'd recommend checking out the neighborhoods a few miles South (near Thunderbird International Business School and ASU West). They are older neighborhoods but a few hundred dollars less than the areas right around MWU.
Good Luck,
AZPOD Rocks