I think that you are referring to Sonoma Valley, which is where I live. Sonoma is so quirky because you can't simply say that one certain area is the best. The east side of Sonoma is certainly considered a great area of Sonoma, but there are so many pockets of "great" all over town. If you wanted to tell me a certain price range I could email you some houses that are on the market in that range that are in nice areas.
In terms of schools, my 2 kids go to the Sonoma Charter School, which is a public school with its own governing board. Sonoma has five regular public elementary schools, two K-8 charter schools (one Waldorf, one Montessori/traditional), three (maybe more?) private schools, two middle schools and one high school. I would suggest coming up for tours of the schools to get a feel for which you like the best. The website greatschools.net is fairly decent. If your kids are younger, the Sonoma Valley Mothers Club offers good resources on their website.
Call or email me if you need any further information. I am happy to drive you around on an informational tour of the various neighborhoods sometime.