If you're talking about a mouse, "it/he lives in the corner" wouldn't be wrong. Since we have no context, "it lives in the corner" seems to be a perfectly valid translation. I don't know how else the French would say it if "il vit dans le coin" can't be translated that way.
A cul-de-sac is a dead-end residential street. 'Dans le coin' is a set expression meaning 'nearby', 'locally' or 'in the neighbourhood'.
Check this thread: http://forum.wordreference.com/showthread.php?t=1972538
Basically this is indeed an idiom of such expression.
I'm not a native french speaker (in fact if you look at my explanation above I use la instead of le), I've just had a teacher talk about it in class. According to this: http://en.wiktionary.org/wiki/coin#French "dans le coin" means "in the area" and "fait le coin" means on the corner. Although I've never personally seen "fait le coin". Before looking it up I would have used dans le coin for all the things.
"On the corner" is marked incorrect but "in the corner" is given as a correct answer. A native or near-native French speaker, please clarify: "dans le coin" does not mean someone lives in a house on the corner of the street, but can mean a birds lives in the corner of a room, say. Merci!
I clearly remember being taught that 'habiter' meant 'to live' in the sense of reside whereas 'vivre' was more to live as in life. (Like wohnen/leben for those that know German). I see DL always using 'vivre' in examples. Is that a regional thing or just not current French?
Yes, I'm replying to my own question. I couldn't wait for an answer. And according to this my memory is correct. http://french.about.com/od/grammar/a/habiter-vivre.htm. So perhaps vivre is being used here as this is a set idiom, though the rule would have habiter for reside in most other cases?
Vivre is living (and also to be alive). Habiter is to reside in a city, a country. You can say: Je vis dans un appartement (I live in a flat) or J'habite dans un appartement. You can say too, Je vis à Paris or J'habite à Paris. (I live in Paris) But in some case, you can say only one or the other. Je vis tout seul dans mon coin (I live alone as a loner/in my little corner) and not "habiter", you can't "habite" a corner, same thing for "je vis seul", I live alone.
When someone ask for your address, it's more precise to say "j'habite cette adresse". It's almost synonym to "je vis à cette adresse", but I think you can "vivre à une adresse", and it's not yours, if you "habite"normally it's yours. It's not so clear than that, but a bit of the idea is there. Où habites-tu? J'habites au 3 de la rue Victor-Hugo. "habiter" is rather expected than "vivre", even if "vivre" is not incorrect, it's not the answer you expect if it's an administrative question or something like that.