For a business-style directory, what's the best way to handle the subcategories for specific locations (cities and towns)? I don't think I want to list every single town/city in every state, at least initially, and what do you do when someone serves more than one location (city) or even serves multiple states? I want to get it right before I go too far down one path. Any suggestions would be welcome.
You should take a look at the category structure for wow directory - very nice! It has an amazing category structure that I never fully appreciated until I really got in there and wandered around one day. General categories interlinked with regional categories. I feel sorry for whoever built it if they did not use a script somehow. I believe that teamskaffe.com is similar
Linking categories and regions is a good way to do it. what I dont like in wowdirectory is the huge number of empty categories due to this structure. A better way to do is to only show non empty categories. Sphider is a free script to create a simple search engine.