cjl, I honestly don't know anything about Tres Cantos. Did you say you were going to be working at Lucent Technologies there or was that someone else??
Anway, if you want to live in the city center of Madrid the above suggestions are great. La Castellana is really nice, but the farther north you go the less "Old Madrid" feeling you get and you enter the financial/business district quickly.
I have a suggestion. My ladyfriend and her family live in a neighborhood across the river (Rio Manzanares) along the Paseo de Extremadura (specifically, in Barrio Lucero, but there are many neighborhoods along this long, divided boulevard) and you can see the Palacio Real all along this street and until you reach the top of the hill.
The area itelf is really nothing striking, nothing special, nothing really historic other than the moorish (and smallish) church at the bottom of the hill. This entire area was built, probably, in the last 60 years and the the flats are much cheaper than central Madrid. I often walk from here, across the river, and up the hill into the city center in about 20-25 minutes at a good pace, but there's a number of busses that follow this route as well as 2 metro stops in the area (Lucero and Laguna, Grey Line #6 - see
metro map here ). It's a working-class neighborhood and has all the typical bars, smallish restaurants, cafés, and shops that you'd find anywhere. As I said, it's really nothing special, but VERY close to the city's old center and lacks much of the traffic/noise that the city center has and for a smaller price. Just something more to consider...as if you didn't have enough ideas/suggestions. hehehee..
In fact, an I-friend has a kind of website with a couple of new photos (out his window) posted every so often
HERE . Not really indicative at all of the area as the photos he takes are usually just of these 3 towers (the largest buildings in the entire neighborhood -- most are your typical 4-5 story buildings). This area is also not far from the Casa de Campo park.
Saludos, MadridMan
