It's really up to you and your tastes and what's available at the time. I personally don't like to be right in the city so I have always lived outside. For a while I lived on the Keio Line heading out of Shinjuku at a station called Tsutsujigaoka, but most of my time here has been spent to the South of Tokyo on the Toyoko Line or Meguro Line. I recommend Jiyugaoka on the Toyoko Line for somewhere that's outside Tokyo but also close enough to everything. It's quite funky little place as well in its own right.
Check out this website as well for info
http://www.tokyocityapartments.com/guesthouses-info/
Check listing 13 - Green House in Jiyugaoka - plus there are lots of other great locations on here. Hope it helps
