I've lived in Nashville most of my life. I'm still a pretty far from law school (applying for fall 2010, studying for the LSAT now), but Vandy is one of my all time top choices.
I currently work near the Hermitage area, though I live closer to the Vandy campus. I'm lucky, because I go the opposite direction of rush hour traffic each morning. Coming in from Hermitage could take you awhile at times (about 20-25 minutes in perfect conditions, 45-60 in traffic).
Not saying that Hermitage doesn't have its high points, but there are other equally affordable, more convenient, and less dangerous areas that this. Its no murder capital in that area, but its worse than some. I'd also look into Bellevue (affordable suburbia, lots of starter families, cookie cutter homes/condos, and chain stores), 12th South (trendy, up and coming, close to downtown, but still a little rough), Sylvan Park (don't know a lot about it, except that its popular with Vandy students), etc.
Truly great city to live in though. Fun nightlife, more to do than you'd expect. I wouldn't mind not leaving it for a few more years. Let me know if you need to know anything about the area!