The Rocky Mountain News has a series running on Denver Public Schools: Today's article
It's an unfortunate situation right now, but definitely something to be aware of for anyone moving into Denver proper, especially if school is on the horizon. I'm not sure if there is an effect on property value or not ... housing is still much more expensive in the good neighborhoods in Denver compared to most places (Cherry Hills being the big exception).
I will echo the plugs for Littleton ... definitely look at the older downtown area. If you like historical houses, there are a few little Victorians and even some Craftsman/prairie and farmhouse style homes around, but also newer construction (a lot of post-war brick ranches). The light rail has a station right there, and they have been revitalizing Main Street (which is a bona fide old-fashioned Main Street) for the past few years, with shops and restaurants. You have the town theater for musicals and plays, a brand new rec center ... you wouldn't even really need a car, except to go skiing, of course.
And if you need to drive downtown (Denver, that is), Santa Fe is much better than I-25. It generally takes my husband 30 min during rush hour. Without traffic, it's 20 min tops. I can get to the Pepsi Center for hockey games in 20 min, at 6 pm on weeknights (going against traffic, of course).
Englewood is a little farther to the north, closer to downtown, but the schools aren't quite as good.