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Kara's is pretty tasty! My favorite cupcakes are by Teacake and Miette. :)
I like "It takes the Cake" ones better. Their red velvet ones are drool-worthy.
Here is a list of Bay Area cupcakeries:
http://www.sanfranciscostyleunveiled.com/thelounge/2009/6/3/perfect-10-san-francisco-cupcakes.html
Omg...Kara's cupcakes are sooo good! Just got some this weekend!! Highly recommend!
I think it depends on the flavor. Sprinkles Red Velvet is the best IMO. I don't even know if Kara's has red velvet, but their cupcakes are also delish.
Kara is okay. Had them this past weekend it was eh.
I LOVE the red velvet cupcake at Sugar Butter Flour in Sunnyvale
Nothing is better than the Red Velvet cupcakes from SPRINKLES 
Kara's are too greasy tasting, I used Brown Sugar Bakery for my friend's bridal shower and they were delicious! And WAY cheaper than Kara's or Sprinkles. www.thebrownsugarbakery.com
Honestly I like both Sprinkles and Kara's..;-) However, if you're near San Mateo, there's a place called Sibbey's which is delicious too!
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Are they really better than sprinkles?! :)