The Bay Area is "bike friendly" as in, you'll have a lot of company out there on your bike. Lots of people bike in the city and the rest of the peninsula. In terms of geography, some areas are quite hilly and difficult (Potrero Hill, for example), while others are much flatter (like SoMa). Some transit options exist for bikers as well, as in you can take your bike on Caltrain if you're commuting around the peninsula. The space is limited, though, so you might not be able to get on your train, but I think they've recently added more capacity (after I stopped commuting this route daily, can't confirm).
The Bay Area resident drivers, however, are not particularly bike friendly, and the city hasn't done a great job of protecting bikers with protected bike lanes, either. So yeah, you can ride your bike, and many many people do. But it's also pretty dangerous, and people get hurt all the time. Join a bicyclists' coalition and stay informed. Like this for example: Anonymous San Franciscans Are Making Renegade Bike Lanes.
Ride, but be safe. Unfortunately, no matter how prepared you are, bikers can still get hurt by drivers who aren't paying attention, even by cops: San Francisco police car hits bicyclist on Bike to Work Day. In this case, the cyclist was doing all the right things, in a bike lane, and a police car not paying attention to the bike lane on BIKE TO WORK DAY of all days pulls right out into the bike lane and the biker goes flying.
Sources linked, and also personal experience commuting by bike daily for several months.