Most people seem to live on the Southside. It's the closest residential area and you can walk to a large selection of bars. (If that is important to you). It is starting to get pricer there, however. But if you can get a roomate or two you can get some very cool apartments. The ungergraduate Duquesne population tends to live there, so close to the main drag it is a little loud on weekends. Nothing like South Oakland though, which is Pitt's undergraduate slum. Squirrel Hill/Shadyside/Regent Square get some people. Only a few live downtown, it's expensive and a few in my neighborhood or in the North Hills.
Absolutely get the parking pass. If you compare the cost of the bus (I think it is 1.75 now per ride) with the parking permit, the car is perfectly economic. Plus you truly do not have time to wait or work with the bus schedule, your time is at a premium.
I have a few LS friends who bartend. It's a good way to get some extra cash on a flexible schedule.