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Coffee shops etc: one near me has performances from local bands/solo artists every Saturday. The performances range from my friend's jazz trio to this one Phish-esque jam band. I think they only get paid in tips, but they also get free drinks and exposure. It's a fun place to play/watch others play. There's also this place called the Jammin' Java in Vienna where my neighbors band plays occasionally.

Local arts centers: our local park has a perfuming arts center which hosts improv shows, free plays from local theatre camps, and concerts from local bands. Actually going there this Sunday to watch a Sound of Music production. I'm pretty sure the bands that play there get paid, and they're allowed to sell merchandise by the ticket window.

Local functions: for example my town does a 4th of July fireworks gathering that also features a concert.

Outdoor malls/town centers: one in Reston, VA--about 45 minutes away from me--has a "Summer Concert Series" and my friend's band played a CD release show there recently. One time I went to a smaller, more local outlet mall (across the street from the restaurant I work at) and there was a guy playing an acoustic set for their "Concert Series."

Local music shops: a tiny shop near me has an upstairs "jam room" that also occasionally hosts concerts/battle of the bands type functions.

Open mic nights: My high school's International Thespian Society hosted four open mic nights this year, and they were all big hits. I performed there three times (one musical performance, one stand-up routine, and a spoken word poetry reading) and it was a lot of fun. I don't know if you're in high school (and if you are I don't know if your school hosts an open mic night), but I assume things like this are everywhere at small clubs, restaurants, etc.

My advice would be not to turn down any gig, no matter how small it is. A friend of mine--who's an incredibly gifted guitarist--and his band play coffee shops, pizza parlors and the like. We all know he's going to be big some say--hell, even he knows he's going to be big someday, but he's too humble to admit it--but he plays these small local gigs because A) at 17 years old they're the only gigs he's likely to get B) he likes the exposure and C) it's just plain fun to play these small local venues and entertain your peers.

No gig is a bad gig (unless it's somewhere ridiculously sketchy).
 
That's a tough question. Most everyone would rather play locally just because its less hassle at the end of the night. If you're not being compensated to travel then you're simply on a mission for exposure. Your personal and group's motives are going to determine much of where you'll play. I'm lucky that we are 1 hour from Manhattan/Brooklyn, 1 hour from Philadelphia, less than an hour from beach bars and a little over an hour from AC. Years ago we wouldn't entertain Baltimore gigs because of the travel. Today we wouldn't simply because we're getting older.
I think no matter where you are looking to play things have changed over the last 10 years and not in a good way for live performers. This area is still alive with gigs but they pay less and attract smaller crowds.
 
Unfortunately, with a few exceptions, this is the case in most cities. In the late 1970s through the mid 1980s, I was in a band that was gigging 5 nights per week. Most of the bands playing in Boston and Providence areas were doing the same. Now, most of the clubs are gone. Many of those that remained have switched to electronic dance music, karaoke or sports bars. There are many factors that have contributed to this. Higher costs to bar owners which has caused them to look at other ways to draw a crowd. Tougher drunk driving laws have resulted in fewer people going to bars and clubs, more choices on which to spend descretionary income and so on. Bands that are able to gig are generally playing for much less money than they were 20 or 30 years ago due to the fact that there are a lot of bands who are willing to play for very little money. Club owners and people who used to go to clubs are tired of hearing the same old songs. How many times can can you listen to different cover bands butcher "Sweet Home Alabama" or "Walk This Way" before you finally stop going to clubs that have bands? I have been fortunate enough to play in some touring bands and have played some very large shows. When I do play somewhat locally, its usually at a casino or an outdoor festival. We do not play for "short" money but we also don't gig as much as we did years ago. We are selective about what we do.
 
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Unfortunately, with a few exceptions, this is the case in most cities. In the late 1970s through the mid 1980s, I was in a band that was gigging 5 nights per week. Most of the bands playing in Boston and Providence areas were doing the same. Now, most of the clubs are gone. Many of those that remained have switched to electronic dance music, karaoke or sports bars. There are many factors that have contributed to this. Higher costs to bar owners which has caused them to look at other ways to draw a crowd. Tougher drunk driving laws have resulted in fewer people going to bars and clubs, more choices on which to spend descretionary income and so on. Bands that are able to gig are generally playing for much less money than they were 20 or 30 years ago due to the fact that there are a lot of bands who are willing to play for very little money. Club owners and people who used to go to clubs are tired of hearing the same old songs. How many times can can you listen to different cover bands butcher "Sweet Home Alabama" or "Walk This Way" before you finally stop going to clubs that have bands? I have been fortunate enough to play in some touring bands and have played some very large shows. When I do play somewhat locally, its usually at a casino or an outdoor festival. We do not play for "short" money but we also don't gig as much as we did years ago. We are selective about what we do.

Excellent post. I remember the days when nightclubs often had large dance floors, PA and lights, and even a house soundman.

A club owner once told me "I'll always feature live music, and I love you guys, especially your brother on guitar, but even though you draw a crowd I don't make as much money as I do with karaoke. You guys take up the front of my club. The karaoke guy takes up just 1/4 as much room, I only have to pay him 1/4 as much, so do the math. And he also draws a crowd: there's a big group that does karaoke at the club up north on Thursday night, the club to the south on Friday night, and they come here on Saturday night".
 
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To answer OP, most urban places have some sort of live music scene. As for the "best" one, that would be hard to call. Take Austin, TX, for instance. Yes, they have a killer live music scene for the size of the local population. But they have *a lot* of quality bands competing to play there, so getting a gig might actually be difficult. The same goes for NYC. Other markets, like Boston, the difficulty might be finding the venues. Getting gigs for Monday through Wednesday might be easier, provided you find places even doing bands those nights, while Friday and Saturday the club/bar/venue owners are going to want to book proven draws.

If you have a hot YouTube video, that would be the best way to book gigs.
 
Isn't Austin TX. supposed to be the live music capital of the country or something like that?

Happening music cities like LA, Austin, and Nashville offer lots of great gigs. On the downside, the competition is extremely fierce (as HolmeBass just posted). That's good news for listeners, but performers have a difficult time breaking in to those scenes.

I'm not speaking from direct experience (I ain't that good). Much of what I learned came from my brother-in-law, a keyboardist/arranger who has worked with top-tier performers and on major motion picture soundtracks. As well established as he became, he still got stressed out taking vacations with his family. He explained that he was somewhat lucky to break in to that scene (always takes some luck, no matter how talented you are), and he worried that leaving top gigs unfilled would allow some new hotshot to come in and take gigs.
 

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