John, my shop is in my basement. If I had my unlimited choice of where the workshop was, it would be in a seperate building that had an insulated overhead door, a regular entrance door, air conditioning, heat, a large sink with hot and cold running water, lots of windows and skylights, and a great alarm system!
Here are the pros and cons that I've seen in my shop:
Pros:
-Cool in the summer, warm in the winter
-Close to the house living area so family can visit me while I'm working.
-Very secure. I could barely get the equipment down there, I can't ever see anyone stealing it!
-power, water, flooring, walls, all suitable for a shop with no added expense
-no problem getting to it or using it in inclement weather
-controlled humidity and temperature for tools and for wood
-cars can stay in the garage
Cons:
-difficult to move tools in or out
-all raw materials and finished projects have to be carried up/down the stairs
-can't get a longer than 10' board down without removing a window
-part of my shop is under the kitchen, leaks from sink, garbage disposal, dishwasher can ruin equipment. I am in the process of hanging a canopy to prevent this.
-if you live in a wet area that is prone to storms, the basement can flood and ruin your equipment
-Close to the house living area so family can visit me while I'm working.
-need good dust collection or dust will be throughout house
That's about all I can think of right now. I'll add more if I think of any. Keep us posted on your decision! Here's a quick pic of one half of my shop.