Well, any sort of settlement will do. I'm quite partial to the salty, colourful qualities of Anvil. From the mentally unhinged Bosmer sailor wandering endlessly up and down the pier, to the parade of haunted and abandoned landmarks, it's just got so much mystery to it. The Gold Coast is a particularly sunny, beautiful part of Cyrodiil, and you can even net yourself a cracking real estate bargain[footnote]Bargain may be haunted.[/footnote]!
Second place has to go to Skingrad, partly because of how much it looks like something out of a Dracula film. The town is even connected to a vampire's castle that perches on a rocky outcrop nearby, accessed by a lone stone bridge arching perilously over a killing drop. Skingrad is also the location of a fantastic Whodunit-style quest for the Dark Brotherhood. There's a vampire lair within short walking (or falling) distance of the castle, and most of the conversation in town revolves around wine, cheeses or how much fun it is to raid goblin lairs.
Second place has to go to Skingrad, partly because of how much it looks like something out of a Dracula film. The town is even connected to a vampire's castle that perches on a rocky outcrop nearby, accessed by a lone stone bridge arching perilously over a killing drop. Skingrad is also the location of a fantastic Whodunit-style quest for the Dark Brotherhood. There's a vampire lair within short walking (or falling) distance of the castle, and most of the conversation in town revolves around wine, cheeses or how much fun it is to raid goblin lairs.