hello bear25 and congrats on umich.
i'm a bit biased about ann arbor housing and i plan on living a bit from campus and biking/bussing it. but that's just me. i was actually looking into neighborhoods in the old west side and the northeastern parts of town. i'm looking prematurely, i know.
anyway, here's my $0.02.... i can give more info if you want specific details.
island drive apts/med center court/maiden lane apts are ... well, convenient. and there are lots of science phd students and med students there. if walking distance is your primary motivation, this may be your best option... the apts aren't
too horrible, but still a bit icky (in my opinion at least). some people like them (i have a friend who is a phd student and has lived there for 3 years now and is fine with it), but for the most part, housing really near the med campus leaves a bit to be desired. they just built a bunch of new little condos and townhomes down there, but they're really spendy and i think already all sold.
i would stay away from the student ghetto on that part of town as well (there are a couple of "student ghettos" around the umich ugrad campus - one on the north side by the med and nursing schools and one on the south side) where housing is, well ... icky. and expensive. the north side is reasonable walking distance though.
commuting from other parts of ann arbor is always an option, however, parking is wretched. and if you can get it, it's hella expensive. the bus system to the med campus is pretty reliable, in my opinion, but if you'd rather walk, you may have to sacrifice a bit in terms of a nicer place to live.
for nearby biking distance and right on the umich busline, i'd recommend something up by north campus or in the northern neighborhoods. if you're willing to spend some $$ - kerrytown is nearby and really cool, but good, reasonably priced housing there is hard to come by. the northwest neighborhoods aren't too bad either. but again, biking or bussing or trying to park may rule that out for you.
are you from michigan? are you familiar w/the ann arbor area?
this is a long post, i know. just wanted to get a thread going for finding out a bit about my future classmates! see you this summer!