Please help us begin to navigate DC

For the long term, I suggest you look into North Arlington. My dad lives outside Clarendon and he is walking distance from 3 great parks, a shopping center with http://www.italianstore.com/ and bus stops that for routes that will take him around Arlington and to Metro stations. Within a slightly longer (but still walkable for an adult and a toddler in a stroller) is Clarendon, its Metro station, and a bunch of restaurants and clubs. Clarendon is starting to be known for being full of yuppies, but my dad's neighborhood is full of little kids and parents who encourage the kids to play outside with each other and they are all super friendly.

You'll probably find the most affordable but still walkable child-safe areas along the Rosslyn-Ballston corridor, like Clarendon as martinX says; but if you want to splurge, the immediate areas around Foggy Bottom, Dupont Circle, and Cleveland Park are very, very nice. Can't help you with schools, but the Obama kids go to Sidwell in Georgetown, and my church runs a daycare. (You can email me if you want to know about that.)

If you're commuting to Foggy Bottom and want a yard, the inner suburbs of Northern Virginia are your best bet. That means Arlington, Alexandria, Falls Church, and Fairfax County. Staying inside the beltway (I-495) will make your commute infinitely easier, but will cost more. Staying east of Seven Corners (where several major roads meet inside the beltway in Fairfax County) will make things easier still. You didn't mention a price range or where you're coming from or whether you'll have a car, but please understand that housing in the DC area is NOT cheap (maybe slightly cheaper than it used to be, but the housing market didn't crash as hard here the way it did in say, Vegas). A decent (smaller, older) single family home in NoVA will run you $400K and up in the inner suburbs. For a Townhouse you could possibly find something in the $300K range. Assuming money isn't an issue, then I second North Arlington, followed by Shirlington and Falls Church. Have you visited the http://www.city-data.com/forum/? Very active, lots of helpful people and lots of old threads comparing the virtues of this neighborhood vs. that, and also much discussion of schools and school districts. Renting first is a good idea (there are usually plenty of houses for rent on Craigslist). You really need to be here to get the feel for what is a doable commute and what is not. In the past I've moved "ten minutes away" and literally added a half hour to my commute.

Sounds like the Del Rey area of Alexandria has everything you're looking for. I live in Springfield, which is on the Blue Line and also has great bus service to the Pentagon (as a springboard to Metro). It can be a little more rough around the edges than Alexandria but it's also more affordable since it's technically 'outside' the Beltway. Oh... and pretty good schools from what I hear.

Sidwell isn't in Georgetown, it is up in Friendship Heights I believe. Anyways, it may be a bit below your price range, but I am really enamored with Takoma Park right now, I would suggest you look into private school if you go that route, but the neighborhood itself offers pretty much everything you want, and its adjacent to cool stuff and close to the metro. That being said, I actually grew up in North Arlington and it also fits all your criteria, its just a crappy (but short) commute into the city and full of douchebags these days. And the Italian Store is awesome, but please stop telling the whole internet about it.

If cross-country means California, $400k for a house must seem very cheap. You can't even get a condo in my city for less than $700k.

If you haven't looked at the http://www.dcurbanmom.com/jforum/forums/list.page, it has quite a bit of information about schools and daycare.

Houses are cheap right now! DC market didn't get hit in the way the rest of the country did. That said, hi, welcome, I'm a moderately crunchy, affordable homeowning (with a small yard) father of two little girls commuting to Foggy Bottom on a daily basis (@30 min via Metro). We live and love living in Brookland. I cannot recommend Brookland enough (and a visit to my posting history will prove this). It's not so "urban" so much, but is on the Red Line and an easy jump to the action, but it is safe, walkable, friendly and a community. Best of all it is still an affordable part of the city. Schools, like the rest of the district, are going through a massive transformation. There is no guarantee that if you set roots in the District you will need to move for the sake of schools. Some of the charter schools, if you can get in, are some of the best schools anywhere. Some of the public schools too have been picked up as a sort of "cause" by neighborhoods and have been built into model schools. This movement is now starting to trickle up to the middle school level with the involved parents pressuring the school board for improvements there. http://www.fightforchildren.org/is a great resource for school info. Our daughter will start at a small, (fairly inexpensive) private montesori in the fall, only becuase pre-k 3 programs are limited. We're actually thinking of opening a co-op daycare with our Brookland neighbors.

Adding to the chorus - Arlington sounds like a good fit for you. Decent public schools, easy commute into the city (Especially Foggy Bottom), and the county itself is sufficiently urban that you can easily find a place within walking distance of parks, bike trails, retail, etc. I live in the Ballston neighborhood now - I'm ten minutes from a Metro stop, a stone's throw from a bike trail, and only two metro stops (or a half-hour's leisurely walk) from Clarendon. (Clarendon and Courthouse are sort of the "downtown" neighborhoods of North Arlington - good restaurants, bars, music venues and so on). I pay less than $1000/month for a one-bedroom apartment. If you like, I'd be happy to talk to you about the area in more detail - feel free to memail me.