In terms of where to live, it really depends on your budget. Places are a lot cheaper the further out from the city you are, but then you'll be spending time and money on transport to uni.
Apart from Glebe/Newtown, some other suburbs around USyd include Chippendale, Redfern (the side near Usyd isn't too bad, but I personally probably wouldn't live on the other side of the stn), Forest Lodge, even up to Leichardt.