Nara would be my choice. Slow pace, less stuck up than Kyoto, lots of beautiful sites, convenient to Osaka - its got it all.

Himeji is a nice city to live in, I was there for four years. Very good size (pop. 500,000), big enough to have all the amenities but small enough to avoid all the problems that go along with living in a metropolis. Convenient trains to larger city. Beautiful castle and Engyoji temple.