Now you're talking!
North Bay: Loud and Clear Audio Visual
http://www.lncav.com in Cotati, north of Tiburon (I have never been there) seems to list a lot of interesting items on craigslist (they had a Rhodes Piano Bass for a long time).
In San Francisco:
Guitar Solo for acoustic and classical guitars
http://www.gspguitar.com
Guitar tech/repair to the stars: Gary Brawer
http://brawer.com; in the back of a funky little shop called Real Guitars
http://realguitars.com which sells cool used instruments and amps. Gary Brawer is closed on Sunday and Monday; I don't know about Real Guitars.
In Redwood City:
Gelb Music, a good independent store. They have a separate used and consignment store around the corner from their main store.
http://www.gelbmusic.com
In Palo Alto:
Gryphon Stringed Instruments - more focused on acoustic instruments.
http://www.gryphonstrings.com. a block away from Fry's Electronics, a gigantic superstore which has areas that are very geek-oriented (as in computer and general electronic components, tools, etc.), featuring genuinely awful customer service. Fry's is a Silicon Valley institution (there are a number of other locations).
In Santa Clara (near the San Jose airport):
King Amplification
http://www.kingamplification.com also lists interesting items on craigslist. I went there a few years ago and it was small and limited then, but seems to offer more items now, at least through craigslist.
There are a handful of stores that list items on craigslist - you can look through the listings and triangulate on them if it looks like any of them are carrying anything of interest
http://sfbay.craigslist.org/search/msd?
I did go to Jam Brothers in Walnut Creek and it was very small, just a word of caution.
If you are into pianos:
There is a Steinway Piano store in San Francisco (formerly a big dealer chain called Sherman Clay)
Music Exchange (several locations in the Bay Area, including 700 Van Ness in SF)
http://www.muex.com/locations.php carries the major brands
Also Piedmont Piano
http://www.piedmontpiano.com in Oakland, carries the Fazioli piano which they claim is great. I haven't been to Piedmont Piano but their affiliated piano repair/rebuilding shop, Callahan Pianos, is one of the best.
Yamaha Peninsula Music Center has pianos other than Yamaha, also
http://www.yamahapeninsula.com/used.php
And finally, if you are into accordions:
Accordion Apocalypse
http://www.accordionapocalypse.com
Smythe's Accordion Center
http://www.smythesaccordioncenter.com