I've heard that Chicago's the place to be for Blues and Jazz for sure, but I'm not too sure about other genres. I do know that it doesn't get much better than Austin's musician community. They have some really cool boutiquish guitar shops there too. I guess though the same problem could be present there that Pony says is in LA...oversaturation. One way to look at it is that if you really are good, then it might be that much easier to "blow up" where you are since there's comparitively not as much competition. In the end though I don't think it makes a huge difference where you are, just that you're determined enough.
[FONT=Palatino Linotype]"Bust a nut!" - Dimebag
"Imagination is more important than knowledge." - Einstein[/FONT]