Audience: You want a place where there are (1) many people with (2) money to spend and (3) who are not all necessarily in a hurry. Thus, parks in the wealthier sections of the city make wonderful places to play. Here you get wealthy commuters walking to and from work. You also get people taking an after-dinner stroll with their families or their dates. Another place many find success is in the subway, where people are forced to wait for a certain amount of time in a confined area. Your entertainment is often very welcome, and regular commuters may be willing to give money in order to encourage your return in the future.
Spoilers: Spoilers come in the form of law enforcement, other buskers, rude pedestrians, and homeless people. Law enforcement and other buskers are covered in other parts of this guide, so I will not waste time on them here. In my experience, I have never had any trouble with homeless people. They are always very polite and kind to me. However, keep in mind that you are in partial competition with them for earning money. Making matters more complex, while a dollar in your case might mean a drink later on with friends, a dollar in their cup may mean whether or not they will eat that night. Therefore, to avoid difficult confrontations, be respectful of their space. I do not recommend setting up next to or too close to where a homeless person is asking for money, as you will likely decrease their chances of receiving as much money.
Environment: Does the environment match your act? This is an important question to ask. Are you playing classical music, are you a tumbler, a mime, or a juggler? Depending on how you answer this, you should think about the best environment for your act. For example, if you are playing on a violin, you may not want to be right next to a busy road with lots of traffic noise, and a park might suit you better. However, if you are a tumbler, a large side walk next to a busy street might be idea, with high visibility, lots of people, and a loud boom box to put the noisy traffic in its place.