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OK, I'm sure others here would give you different advice but here's my take on it:
Culture:
Shoreditch, Old Street, Brick Lane (uber-trendy and not that exciting at all, plenty of very cheap Indian restaurants around Brick Lane). If this area were a band it'd probably be Babyshambles.
Soho (less up itself, plenty of cheap-ish restaurants and (largely gay) bars, close to all the major sites). If this area were a band it'd probably be The Pet Shop Boys.
Chelsea (very nice in the village and close to the now rather anonymous Kings Rd. Still reassuringly eccentric as an area. Horrible football team). If this area were a band it'd probably be The Rolling Stones.
Camden (too easily knocked because of its now-tacky market, but still plenty of stuff to do, and still has a certain 'alternative vibe' - albeit in a bootleg Cure T shirt kind of a way - think NY's St Marks Place, but bigger). If this area were a band, it'd probably be The Pogues.
Notting Hill. (Not that fashionable these days but one of my favourite areas of the city. Not as young or 'cutting edge' a crowd as you'd find around Brick Lane, but far more character, better shops, restaurants and bars. Altogether a classier (and more expensive) alternative to Brick Lane and Camden. If this area were a band it'd probably be Portishead.
Living:
All the places listed above are VERY expensive - although you might be able to find a shit-hole dump in them for something bordering on affordable. (Not much of a chance even of that in Chelsea) Better to stick to areas further out in either East or South London. Avoid the cheaper areas of Tower Hamlets and Bermondsey and steer well clear of Newham, which is cheap for a very good reason: it's rough as fuck. Brixton has a bit of a bad reputation but is far nicer than people might think - but again not that cheap. The same goes for Hackney.
"were in london are the freaks welcome and you can roam the streets anonymously and find good culture and art and fine company?"
To answer that simply, I'd say anywhere in the centre and most places outside it have their 'scene' to some degree. you'd probably want to look around Brick Lane which is, for all that people like myself might mock-it, a good cultural centre (but can get a bit sketchy at night). Stay away from Tottenham, Plaistow, Bow, Mile End, Stepney and East Ham. You'll notice relatively cheap flats there, but those areas really aren't worth the hassle.
The bottom line is that nowhere in London is cheap, so you're better off looking for bargains in nicer, usually more expensive areas, than sticking with the so-called cheaper ones.
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