Boy, can I relate to the decisions you face.... in more ways than one. Your questions cover a range of issues, the core of which is: How can we live our values? My ex-wife and I faced the same issues about 10 years ago, prior to the birth of our son. I thought we needed to move from Berkeley, to Albany or Lamorinda, to ensure a quality education for our child (now children), but I knew we didn't want to sacrifice our quality of life. Piedmont was out of the question financially.
In the end, we stayed put. When it came time for school, we applied to some private schools, but didn't get into one. Long story short, our kids went to a Berkeley public elementary school and I am now a convert. If you look at resources like http://www.greatschools.net and compare teacher tenure, student:teacher ratio, etc Berkeley does pretty well. In the main, students who come from a home environment where education is highly valued do well in Berkeley.
Along with a good education for your children, you get a center of cultural and urban diversity -- a playground of sorts -- for adults: three BART stations, two with large parking lots; several business districts with shops, boutiques and dining.... Shattuck Avenue in North Berkeley, Downtown, Elmwood (College Avenue), Solano Avenue, Fourth Street, etc.
Berkeley is expensive, and not for everyone, but it might be worth a look. Another option to consider: Neighborhoods in Oakland with desirable elementary schools. In all likelihood, this would require you to re-evaluate your situation as your children approach middle school.
Best of luck!
In terms of shopping, I did not see any stores in Danville where I would actually shop. But at least they have a movie theater in Blackhawk plaza, a step up from Alamo lack of amenities.
Also, there are new communities that are still building in East Danville, but those are cookie cutter boxes with no privacy.
Walnut Creek sounds great...except the houses are old and located on windy street and hills with no sidewalks.
If you want to live in an area with good shopping, entertainment options etc., look no further than Danville. It just gets better every year. Our restaurants are many and varied and shopping is almost all boutique type. Check out the Danville Livery - Stores like Azzulina and Elegant Clutter for furnisihings, many clothes boutiques and restaurants such as Patrick David, Forbes Mill and Piatti. Plus you are only 15 minutes from Walnut Creek and BART access to San Francisco.
Lafayette is also a good area to live. A little like a smaller version of Danville plus better BART access and closer to SF. Some terrific restaurants there.
I could go on and on but these are the best options IMO. Let me know if you are visiting any time. I would be happy to give you a guided tour.
Bernard Gibbons, Realtor, e-PRO Certified Internet Specialist
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585