Where to Stay
When trying to decide where to stay, where to fly into, etc here are some things to bear in mind:
Sales tax is slightly lower in Orange County than in Los Angeles County. This won't make any noticeable difference when you're buying, say, lunch, but will make an impact on the final bill of, for example, your hotel room or rental car.
Also, speaking of sales tax, just an FYI - there is no sales tax on necessary food, i.e. food at the grocery store. Fast food restaurants do charge tax but if you buy bread or something at a grocery store or market you will pay the base price. Sales tax here is not reflected on the price tag. If something costs $5.99, when you take it up to the counter you won't pay $5.99 (unless it's food) but around $6.50-7.00. Bear that in mind when budgeting.
If you fly into Orange County you'll fly into the John Wayne Airport (aka the Santa Ana or Orange County airport). Compared to other airports worldwide, this is a relatively small airport but compared to the other airports in this area it is a medium-sized airport. There aren't many direct flights but mostly flights to connector cities such as San Francisco or Denver. It may be more difficult to arrive via John Wayne Airport but if your base is going to be nearby it may be worth the effort. Arriving into LAX is always a hassle and once you get out of the airport, you're in for a long drive to get to OC. The smaller airports - Long Beach, Ontario, Burbank - are going to be even more difficult to get a direct flight into.
Orange County is divided up into 4 basic sections. One is south OC, which is closer to San Diego and definitely not ideal for a base if you plan on visiting Los Angeles. The other three areas are divided basically according to the freeways that run through OC. The beach area is between the water and the 405/22 freeways. This would include the cities of Seal Beach, Sunset Beach, Huntington Beach, Newport Beach/Costa Mesa, & Laguna Beach. Seal Beach is at the OC/LA county border & has a nice small town feel. Sunset Beach is even smaller and doesn't have the main street shopping district that Seal Beach has. Huntington Beach is larger and much busier but does have some shopping as well as great beaches and the Bolsa Chica wetlands. Newport Beach is more upscale - shops, hotels, etc. are more expensive here and there is a great outdoor mall called Fashion Island. Costa Mesa, just north of NB would be a little less expensive and also has a terrific shopping mall called South Coast Plaza. Laguna Beach is more along the lines of Newport - expensive but very beautiful. This town and anything south of there (Laguna Nigel, Dana Point, etc.) would also fall into the category of most likely being too far to make a base if you wanted to visit Los Angeles more than once (and there's really too much to see in LA to fit into one day trip).
North of the 405 but south of the 91 is the central area with cities that have the main tourist attractions - Anaheim & Buena Park. Further east are also the cities of Santa Ana, Orange, & Irvine. All three of these cities have their own attractions, just less popular than the big draws of Disneyland, Knotts Berry Farm and the sports & concert venues. Orange has a great old town district with lots of antique shops and some terrific restaurants like The Filling Station and the historic Watson's. Santa Ana has some good museums. Irvine has the Spectrum, an average shopping and entertainment area.
North of the 91 fwy is North Orange County with cities such as Fullerton, Brea, & Yorba Linda. Fullerton has a quaint downtown area with shopping and restaurants as well as a state college campus and a train station. More on this later. Brea has some nice shopping. Yorba Linda has Nixon's Presidential Library & Birthplace.
When trying to decide where to stay, if you want to make OC your base, you need to bear some things in mind. The more expensive hotels are going to be along the coast and in & around Disneyland. Alternatives - if you want to be near the beach - would be to try Seal Beach or Costa Mesa; if you want to be near Disneyland, try Fullerton.
When trying to decide on a city, also bear in mind that the 405 & 5 fwys (the 5 cuts diagonally through the county) will take you directly to LA. The 22 and 91 fwys will not. From the 22, you would need to transition to the 405. The 91 would require a change at some point - the 405, the 5, the 110, or the 710. When considering safer places to stay, most of the cities I suggested would be fine with the exception of Santa Ana. There are some tough areas in that town.
Also consider traffic when deciding on a base location. As I mentioned before, Huntington Beach, especially on weekends and in the summer, can have horrendous traffic. Fullerton around the state university can be terrible. Costa Mesa south of the freeway and north of the beach, especially around an area called "Triangle Square" can be unbearably slow going.
Fullerton has the previously mentioned train station. This can be helpful for visits to LA, Santa Barbara & San Diego. The train goes frequently and is fairly resasonably priced, depending on where you want to go. This makes a day trip to San Diego, for example, much easier without having to change hotels.
For more information on the area, check my similiar write up for Los Angeles.