[HappyIchigo]

I'd want to live in Tokyo because it's the only place in Japan I could currently imagine me living in. I lived there for a year, so I've family and friends living there. Of course Tokyo is very crowded, but then again so is every big city.
What I loved about Tokyo is that it's a city of superlatives. Whatever you want, you can find it. You never get bored as there are always new things to discover. And what jasonbvr said about public transportation is absolutely true: once you've learned how to read the plans, maps etc. you can go everywhere you want.
Due to the fact that I've so far only been living one Japanese city (Tokyo) I can only just assume that you can have a great time in other towns as well (especially if you look foreign and like to get attention ^_^)