Place in Fiction

I just returned from a wonderful vacation in Seattle. All that green reminded me so much of home--I grew up in the St. Louis area. My wife and I loved it, and we hope to come back in a few years.

As a writer, my brain's wheels kept turning as we went through all the landmarks: how could I use this setting in a story? A murder mystery in Pike Place Market? A romance that featured Defiance Point? An supernatural adventure on Mount Rainer?

I find that I do this whenever we go on vacation. Of course, I can't write fast enough to get every setting in that I want to. I also worry about the research necessary to really do the place justice. Will I remember it like it really was when I get back home, in front of the computer screen?

So, my questions are these:

1) For writers, do you find yourself doing what I do when you visit a new place? Also, how important is place in your writing? Do you like to use exotic settings, or do you stick to what you know?

2) For readers, do you prefer the setting in books to be in the forefront (like a character itself), or does it not matter, as long as the place seems real?