There is a somewhat recent thread (which I won't search for, but you can) that covers most of DC's neighborhoods and places to go.
Rent in DC, like in any other city, varies wildly by neighborhood. In some areas you'll pay well over $2000 for a small one-bedroom, in other areas you'll pay $1200. It just depends where you want to live and what's important to you. I've lived in the city for 13 years, and before that 5 in the suburbs as a kid. Even the closest-in suburbs (old town, rosslyn and around, chevy chase) are a bitter pill to swallow if you want anything vaguely urban (and vaguely urban, by the way, is all you'll ever get here, even in the most built-up parts of the city). If you don't panic when you start looking, and if you remain patient, you should have no trouble finding a decent place in the district. Don't give your tax dollars to Virginia.