Most places will ask for a 1 year lease. Some owners will agree to a shorter time frame (6 months) but will likely raise the rent somewhat for this. A good agent can help negotiate for you. Generally, you'd have to pay the first month, one month's deposit and a utilities deposit. You'll also have to pay for the "stamp fee," where the rental is registered with the government (the agent does this for you, but you have to pay for it - I believe it's roughly 300 rm).

Sorry - can't help you on neighborhoods around Georgetown/Penang. It's something to discuss with the agent - or you might try posting the question on another forum, such as Lonely Planet's Thorntree or the Expat KL forum. I'd suggest being open to all areas, then making your decision once you've gotten your bearings. The area of KL that I eventually settled on was in an Indian neighborhood - very, very few "western" ex-pats. I loved that neighborhood, but people that I would talk to would make faces and wonder why on earth I chose to live in Brickfields when there were "such nice ex-pat areas" so close by.