I started a few years ago and back then most people lived in Derby, but some people did commute over from Nottingham and managed fine with the hopper bus. It was normally once people got into the clinical years then they'd migrate to Nottingham, but I think now it's become a lot more common for people to start GEM Nottingham and travel through. Personally I lived in a flatshare in Derby for pre-clinical years, then moved through to Nottingham, however I've had my fair share of placements at Derby and I'm well acquainted with the Hopper bus! My take on it is that Derby is a bit cheaper to live in, saves you the commute and will make it easier to socialise with people on the course. In Nottingham, rent's more expensive (especially halls) and working around the hopper bus timetable can be annoying. However there's more going on in Nottingham and if you're super keen to live on a Notts campus and can cope with the travel then it shouldn't be a problem.
If it's more that you're looking for halls type accommodation then there's Abbey Lodge in Derby - I've known quite a few GEM students to live there (although they've not had many positive things to say about it, other than the proximity to the medical school!).