Hi Need and thanks for your question.
I recently responded to another homeowner who was concerned about power lines, towers and a substation nearby. I can understand your confusion--there's a lot of conflicting information available both from friends and from the internet regarding the possible health hazards. According to my physician, low but constant levels of exposure to electro-magnetic fields (EMFs) were thought to be the cause of increased risk of childhood leukemia and some other forms of cancer. This theory was later dispelled by a study done in 2007 of Danish utility workers. In that study, it was found that the incidents of certain cancers, including breast cancer, brain cancer and leukemia, typically associated with EMFs were not higher than that of the unexposed population. (See http://www.webmd.com
under "electromagnetic fields" for more information.)
Despite this information, when I encountered a home near power lines, I went around the new home with an EMF meter to read the amount of ambient EMFs in the home. Yes, there appeared to be a lot of EMF from the power lines leading to and from a local substation and the area around the home. However, the EMFs coming from the television, the microwave, the electrical panel in the home were also much higher than the substation or power lines.
In the end, the decision to purchase or not to purchase based on the danger or EMFs is one that cannot be currently supported by medical studies or data. What really matters is whether or not you are comfortable with the presence of the power lines and tower. Thus, the decision to buy or not is entirely yours.
To help ally any fears or provide you with more information, try PG&E's informational FAQ on EMFs at http://www.pge.com/myhome/edusafety/systemworks/electric/emf/faqs.
At the end of the webpage there is a link to a helpful EMF in the workplace brochure.
Good luck and happy home purchase!!
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA