I'm 29, born and raised in Waco.
I can tell you this:
Like most have already said, Woodway, Hewitt, and in the general vicinity of Lake Shore Drive near Lake Waco (i.e. near Ridgewood CC) are easily the best parts of town to live in. However, the last place is probably Waco ISD. A lot of the people near Lake Shore drive that are affluent send their kids to private schools. Those places are convenient and it's where the educated/respectible citizens live for the most part. Generally the closer you are to the Brazos River, the more ghetto it is. There are exceptions--like Austin Avenue. However, there are a lot of great things in that part of town like Cameron Park and the Zoo--I just wouldn't live there. There has been a lot of investment in recent years revitalizing the down town area--again, I wouldn't live there though.
Waco ISD is horrible. Don't send your kids there. There a a lot of schools in that district that are part of WISD--if any are good, it's the exception to the rule. Your kids would for the most part be going to school with other children that's parents got pregnant in their teens. University is better, but I wouldn't call it great.
Midway, China Spring, and Lorena are all good school districts--where most the parents were actually grown ups and married when they had kids. Midway likely used to be the best, head and shoulders over the others as far as public schools go, but it's slipped in the last decade. It was exemplary when I was there. Now it's just acceptable.
China Spring and Lorena are also not bad parts of town to live in at all, but they're nowhere near as convenient as Woodway/Hewitt. Robinson is not bad.
I wouldn't live hear Baylor. It's kinda of ghetto other than the newer apartment complexes full of Baylor students.
That's Waco for you.