From the 10,000 word post:
"A preferred setting will be that which allows as much latitude for your players as is reasonably possible."
Latitudo is a Latin word, meaning extent, width or size, and came into popular usage in the late 14th century in description of the "breadth" of the known world. So when I say that the game requires "latitude," I mean that it requires living space.
I do not mean merely that the boundary of your world must be a hard distance to walk in a lifetime - though that doesn't hurt. I mean also that your world needs facets within it that make living possible. Most of these facets exist within the original books of the game, though they are for the most part expressed very simply. Your world needs to contain places within it that are of great convenience to the players; places which they can come to recognize, and which fit together logically so that the players can adapt themselves. It helps to think of the world as a set of player 'rights' ... things the player is entitled to expect upon joining your world.
Players have a right to resupply. This requires a town, and probably lots of towns, full of food, weapons, tools & equipment, healing centres, informational bureaus, men-at-arms ... and most of all, 'friendlies.' The player needs to be able to settle in a place which has a relative degree of consistency, and someone there the player can tell his or her troubles to. A sympathetic ear. A helping hand. Someone who can buy their stolen junk and who can encourage them to go out and get more junk. When you are setting up your towns, think about what it is like to live in a place where people get to know you and trust you. Don't just imagine a lot of surly, unhappy NPC's ... stuff into your town a few people who are able to like the party, and hail them as they return. A party should be made to feel welcome once in awhile.
Players have a right to security. If you want a good, long-term game, you can't harangue your players night and day like a boot sargeant, kicking them out of every bed they try to sleep in or assassinating them at every opportunity. If you want moments of danger to have effectiveness, you have to mix them up with moments of safety. This is not to say that every place will always be safe, all the time ... but give a party a break. Let them crawl HOME, let them lick their wounds, and let them sort themselves out and gather their shit again. Letting a party breath will aid them in a sense of purpose, and will encourage them to 'get through this bad time' with a sincere, real goal in mind. If they truly feel they have a home, then getting back there will mean something. Don't take that away from a party.
Players have a right to danger. Having made the point above, now I must make this point also. The players have the right to seek danger and to find it, if they're so inclined. Said danger ought to include in it a measured increase, such that it takes several deliberate steps on the player's part to get his or herself into a real pickle. This is what's patently wrong with the touch-a-wall-and-die concept of D&D. It has the effect of making a player little more than a zero or a one on the DM's ledger. There's no GRAY area ... and worse, there's no "You got yourself into this, you damn fool, now get yourself out." By letting a party see the danger coming, and letting them choose to meet that danger, you shift the responsibility of having that danger kill the party from your shoulders onto the party's shoulders. This is incredibly important for a good game. I cannot stress this enough. If a party is going to have any latitude of play, it has to incorporate a responsibility for their actions - and the possibility of redressing that possibility!
You see, the touch-a-wall-and-die scenario does indeed retain some sort of responsibility. Not a very meaningful one: the whole "You touched a wall? What kind of idiot are you?" moral stream of thinking is somewhat lacking in real drama. But the damning part is that there is no repentance. If the player never touched the wall, there's no knowledge of successfully averting a 'stupid' action (and it's hardly practical for a player to avoid touching every wall in the universe); if the player successfully saves, then the die made the difference, NOT the player; and if the player dies, what has the player learned: To not touch walls. This is a very dumb lesson. It certainly wouldn't cut much ice with Aesop.
Danger must be a step-by-step process by which the player hazards his life by moving forward into something that simultaneously looks both 'dangerous' and 'manageable.' That is the knife edge that sells the play. (1) Indiana Jones opens the door and starts down the passage; it is, after all, just a passage. (2) The floor is crunchy, so he lights a taper - and sees there's about a million bugs; but they're just ordinary bugs, and they're not biting him, so he keeps going. (3) He finds a secret door, but it's just an empty room, so there's no reason not to go in ...
And so on.
Players have a right to reward. There a lot of DMs who fail to grasp this. They've read a word or two from Grandfather Gygax and they insist that sometimes monsters ought not to have treasure. And I agree with that. But I didn't say 'treasure,' I said 'reward.' If the players kill a dangerous giant wolverine whose been terrorizing the local people, of course the wolverine has no treasure. It's a dumb animal. It might have a hide worth selling, but probably not after its been hacked with swords - and 'wolverine' fur, while warm, isn't known for its luxury.
However ... the PEOPLE are going to be happy about it, aren't they? And while they may not have a lot of coin, they are going to overflow with good will. That promises a place of safety, and it promises notariety, and it promises other opportunities at danger and greater reward. It is a fool of a DM who thinks the only recompense to a party's action is treasure. Fame, loyalty and, best of all, good will are extravagant rewards. Don't discount them when you consider the party's ledger.
Let me add this: if you can't figure out how to make a party's feat translate into a reward of this kind, you're not doing your job. Someone should find out what's been done, and that someone should be believed. NPC's are not just cut-outs for your towns - they're the best part of your world.
As you are constructing your world on paper, keep these four things in mind.
Draw out places of resupply: towns, villages, hamlets, ordinary houses, an army post, a manor house with its attendant peasants, mining camps, outposts or a crossroads inn. Supplement this with travelling peddlers, caravans, an ordinary adventurer ready to trade - anything that lets the party have an opportunity to better their situation in between dangers. No matter how deep the wilderness, or how off the beaten track they are, there's some logical way of letting them get at least enough to stay alive. It doesn't mean you have to have an omnipresent mega-mall Box Store following the players around on four legs, but it does mean you'll have to be a little clever when they're out of food, out of weapons, out of healing salve and out of pocket. This is YOUR responsibility, O DM. Figure out something that will let them keep going.
Set down places where bad shit doesn't happen, and let the players find them. Defensible caves or uninhabited (possibly weakly inhabited) deserted fortifications where the party can hole up for a few days; a farmer's community not being hourly attacked by beasts of every kind; a town where the party can get a meal in a tavern that doesn't include bullies, pickpockets, aggressive bartenders or knife-wielding bar wenches (is there any other kind?). Sometimes, you know, a bar is just a bar. Sometimes, the wench who sleeps with the Ranger doesn't have VD, and isn't shilling for her assassin boyfriend. Sometimes, just sometimes, a gesture of help really is a gesture of help. People can be considerate, warm, giving, generous and legitimately friendly. Taverns can actually want a stranger's money, and will actually return ale just for the purposes of business. Not every interaction has to include an ulterior motive.
Set out places of danger, and make them reasonably evident, and reasonably avoidable. Yes, of course occasionally you'll want to ambush a party, but warn the party first that bandits do tend to inhabit those roads. Let the party get itself in deeper ... they'll want to! You won't have to dangle much of a carrot in front of their nose. You will, on the other hand, have to make these places of danger seem practical, convenient, and sufficiently lucrative to the party's sense of success. There's no point in making them seem (on the surface) unimaginably dangerous, or indecently hard to get to. Moreover, they shouldn't waste the party's time ... when they reach the danger, let them experience the danger. Don't baffle them or hold them up with empty, purposeless rooms. Carry the party to the matter at hand without unnecessary delay.
And finally, as I say. Make it worth their while after the fact. Reward them.
With a little practice, you'll start seeing how to design your world on the ground to let them take the best advantage of these things. Your world will only get better from there.