My info isn't very up to the minute zanda and the campus has hugely expanded from what was already a large site over the last 15 years or so.
I do understand that some students want to be in city centres but York centre is definitley easily accessible from the campus via foot or bike (with pubs en route!) and the city itself could never be described as sleepy!
No one ever seemed clear how it happened since colleges were traditionally by allocation and not choice but Derwent (especially since York has a good record of state school application ) was always very 'hooray'. I think , if you wanted to, back in the early 90s / late 80s you could lodge requests for a particular college and that's how people from certain schools clustered. Certainly, their social events were very much higher end than others, including a May Ball in my day. It was also associated with certain subjects which might have been a bit more 'public school ' (PPE, for example). But, on the whole, York is a fabulous place to live and study. Anyone would be lucky to find themselves there, I reckon!