living in

Most of the houses at Cal have enough room for the people who want to live in, and the priority of who gets first pick is determined by "house points" (attending events, meetings, philanthropy etc). I believe this is how all the houses at Cal do housing.
I think the only house that requires you to live in is Pi Phi. Check out the Cal Greeks website for this information.
Usually about half the chapter lives out (new members, and upperclassmen for the most part). Living in is much cheaper than an apartment and even the dorms. I don't think you can live in the semester you join in any house at Cal because rooms are determined at the end of the previous semester.
I recommend living in, it's a once in a lifetime experience. As with any roommates here are occasional small issues but overall has been very fun and a highlight of my time at college so far.

A quick thank you to the helpful person who wrote the previous post above...and seemed to have written a bunch of helpful posts in several discussions in the past few minutes actually.