where do you live? is used when you ask in general and want to know a fact that where a person lives. For example, a tourist might ask you "where do you live? (and you're also a tourist just like him on the same trip) you may just answer "I live in California."
Where are you living? is actually an omitted form of "where are you living right now?" and the person asking this question shows his/her interest of knowing where you're living in details or she/he already knows your old place and now wants to know where your new place is. So you would answer "I'm living in San jose, on 1st street, near by the gas station."