For pure function, Breezehome in Whiterun is far and away the best. Its right next to the front gate, has a full smithing area with a smelting hut right next door, two smithing merchants with over 1000 gold, each right next door, a general merchant and herbal merchant a short walk away and yet another merchant in your home if you marry and move her in. The only thing it lacks is an enchanting table, and you can just fast travel up to Dragonsreach for that.
However, Breezehome sucks for immersion, as it's basically a paltry little shack with nowhere nice to display your things. I'm the Dragonborn, Thane of every province, Listener of the Nightmother, Guardian of the Twilight Sepulcher, Harbinger of the Companions, Archmage of the College, known Bard and filthy rich, to boot. It's hardly a fitting home.
So, I use Breeze Home for business and Proudspire Manor in Solitude for decorating and storing all my cool things, as well as standing around like a boss.