The most immediate possibility for extraterrestrial life is bacteria clinging to life in harsh environments. Mars caused a recent flurry when some evidence seemed to have turned up in some of its rocks. On further inspection, however, they seemed to be smaller than the lower limit for cell size. Additionally, organic chemicals found in the rocks could have been created abiotically.

However, if Mars had once had water on its surface (the famous canals) then underground life might still be possible. The only other place in the solar system with liquid water is Europa (a moon of Jupiter?) which has a sort of underground ocean. Water is necessary for life as we know it - but not sufficient.

Interestingly, the basic organic components for life (DNA for example) can be found in outer space. Enormous clouds of alcohol, adenine, acetaldehyde (to name just the A's :) can be found between the stars. It's a long jump from clouds of molecules to Life, but there seem to be planets out there and plenty of opportunity.