Now you have your characters and main plot you want to describe the locations that these characters will be placed. You want to make the locations interesting and appealing to the users. It depends on what you are going for but in my situation I am going for a very dark setting with a lot of drama and the sense of dystopia (in other words you know that something is wrong or undesirable)
In my opinion it is better to think of the city as a whole, then you can start creating locations out of that city. My city involves many corporate companies. Like a bank, supermarket, government and hospital building things like that. I have chosen to have a setting over the water to present a general overview of the location all the characters will be based.
Above I sketched 5 rough sketched layers in Photoshop so I could have a visual understanding of what I was trying to achieve. I drew each layer in pencil, When all the layers were added together I then could move them around to see what looked better.
The benefit to this is now I can start to visualize what locations may exist in the city.
Without giving away too much of my story I have arranged the city for the front to be a poor area by the waters and further back you can see the big buildings in the rich area. The front you can see looks more grimy while in the back it is clear and clean. You can even start to picture locations you can make from this setting.
Try it yourself. Create your setting first, then make a map of locations that could be part of your story. Check back to your plot and look at how some of the scenes can be mapped to the different locations.
If you have any examples of your city and landscapes it would be great to see.
UPDATE: 22/06/2013 Above was the rough sketch. With Photoshop I managed to finish off what it shall look like in the introduction of the game: