I lived in the "barren wasteland" that is on the east side of US-23 in between Ypsi and Ann Arbor for three years in a place called Sparrow Wood Apartments. They we're really nice, a little close to the freeway noise-wise, but for a 2 bed/2 bath top floor apartment with vaulted ceilings, they were only like $850 a month. My place was like 1200 square feet and the complex was small; great place to live if you get one of the units not as close to US-23. This is also the place that those apartment finder places always recommend, too. You really should check them out.
Personally, that is as close as I would ever consider living to the actual city of Ann Arbor, but if you love "culture" (translation: smug douche-baggery and movies about gayness), then go ahead and drop an extra $300-$400 a month to live in that city. Also, for the record, I cannot even begin to tell you how happy I was when I finally moved away from that city, there's nothing in this world that can prepare you for when a piece of white-trash high school-dropout from Dexter tells calls you a loser for supporting your alma mater. Your brain just cannot handle that much irony all at once.
Check out The Arena Sports Bar, supposedly it's owned by an
MSU grad.