Canmore
This town of 12,000+ has a variety of tourist accommodations options. In the past, it served as overflow accommodation for Banff, but has now emerged as a destination all its own. It is located 5 minutes east of the Banff National Park boundary (Banff park gates) and 15 minutes from the Banff townsite, is situated in the "Front Ranges" of the Canadian Rockies, and is flanked by mountains.
Advantage : Because it's outside of the national park, some ordinary people live in the town, and it's not quite as touristy as Banff townsite. By the standards of the area, Canmore's accommodation tends to be a little more reasonably priced. Of the towns in the Canadian Rockies, it is the one that is closest to an international airport, at about 1.5 hours' drive from Calgary International Airport. Canmore is the place to choose if you want to rent a house or condo from a private owner for your stay. For reasons that you can read about on the "Vacation Rentals" page in the Traveller Articles for Banff (see "Know Before You Go"), vacation rentals are not available in the national park communities. As of July 2010, a new cycle path parallell to the Trans-Canada Highway (Hwy 1) connects Canmore to the Banff townsite. (The bridge crossings are not yet complete, so a few short detours onto the shoulder of the highway are still needed).
Disadvantage : Since it's 15 minutes southeast of Banff townsite which, in turn, is 45 minutes southeast of Lake Louise, it's farther from the prime scenery and hiking territory that you find around Lake Louise. In the winter months, it is served by fewer ski shuttle buses than Banff townsite.
Dead Man's Flats
Located on the north side of the Trans-Canada Highway (Hwy 1) shortly after it enters the mountains,and well east of the entrance to Banff National Park, the tiny hamlet of Dead Man's Flats (formerly Pigeon Mountain) boasts two gas stations, a campground, and some accommodations. Maps of Dead Man's Flats: from Municipal District of Bighorn website; from Google Maps
Advantage: Because of its location, Dead Man's Flats accommodations are generally less expensive than accommodations in Canmore or in Banff National Park. Many Dead Man's Flats accommodations are self-catering (with kitchens or kitchenettes).
Disadvantage: It will take more time to go to and from Banff National Park if you are staying in Dead Man's Flats than if you are staying in Canmore. There are no restaurants and no shopping in Dead Man's Flats. There is a convenience store located in one (both?) of the gas staions, but if you want to dine out or stock up on groceries, you will have to go to Canmore. Canmore restaurants will not deliver to Dead Man's Flats.
Harvie Heights
The small hamlet of Harvie Heights is located between the town of Canmore and the east entrance to Banff National Park, on the north side of the Trans-Canada Highway (Hwy 1). The bulk of Harvie Heights is made up of dozens of summer cottages and cabins; it is said that you can't buy a cabin in Harvie Heights, you have to inherit one, because the location next to Banff National Park is so desireable. (Due to park "need to reside" regulations, it is not possible to have a summer residence within Banff National Park.) There are also a few traveler accommodations of various types in Harvie Heights, within sight of the Trans-Canada Highway. Maps of Harvie Heights: from Municipal District of Bighorn website; from Google Maps
Advantage: Accommodations in Harvie Heights are likely to be less expensive than accommodations in Canmore or in Banff National Park. Harvie Heights is about a 5-minute drive from the amenities in the town of Canmore, and only 10-15 minutes from the Banff townsite. Most accommodations in Harvie Heights are self-catering (with kitchens or kitchenettes).
Disadvantage: Harvie Heights is on the opposite side of the highway from Canmore, so that although it might seem to be within walking or cycling distance from Canmore, in fact you have to cross a busy 6-lane highway to get there, making driving the best option. There are few, if any, tourist services in Harvie Heights aside from accommodations.
Banff
Not counting tourists, Banff townsite's population is about 8,700. It is situated in a particularly scenic spot, ringed by mountains. It has lots of hotels and shops, a few museums, and over 200 restaurants! Because it's inside a national park, the federal government restricts the growth of the town and who is allowed to live in it. That said, Banff townsite does have some of the amenities of a normal town - a hospital, schools, churches. If you decide to stay in Banff, this Traveller Article, Banff Hotel Districts and Amenities, will help you decide which location and accommodations within Banff will suit you best.
Advantage : This changes with the seasons and depends on your personal tastes. During the peak summer months of July and August, the centre of Banff townsite is crowded with people. Some visitors like the "buzz" of a busy resort town - the restaurants, the shops, the other people. Some visitors dislike being surrounded by so many of their fellow tourists. Yet even visitors who prefer a quieter destination in summer agree that a slight hum of activity in winter is very welcome. Non-skiers, especially, have more to hold their interest in Banff than they have in Lake Louise in winter. Banff townsite is a convenient base for downhill skiers. With a Tri Area Lift Ticket, it gives them access to the slopes at Norquay, Sunshine and Lake Louise. Banff has a larger stock of accommodation and a wider range of prices than Lake Louise. Banff is considered to be relatively close to Calgary Airport, which is two hours' drive away.
Disadvantage : Some folks find the summer crowds too much. In addition to that, Banff townsite is located towards the east end of Banff National Park. Therefore it is less conveniently located with respect to some of the great hikes at the west end of Banff National Park Plain of Six Glaciers, Lake Agnes, Larch Valley, Beehives, Paradise Valley, etc. Banff townsite also is further than Lake Louise is from Yoho National Park, where such landmarks as Takakkaw Falls and Emerald Lake are located.
Castle Junction
Roughly midway between Banff and Lake Louise, at the junction of Hwy 1 (Trans-Canada Hwy), Hwy 1A (Bow Valley Parkway), and Hwy 93S (Banff-Windermere Hwy), and near Castle Mountain, is a loose group of rustic accommodations: Castle Mountain Chalets, Johnston Canyon Resort, Storm Mountain Lodge
Advantage: Not as busy as Lake Louise village or the Banff townsite. Much more of a "cabin in the woods" type of location. Closest accommodation to the popular Johnston Canyon, and close to several other hiking trails.
Disadvantage: Extremely limited shopping and dining options in the immediate area; if you don't like the restaurant at Storm Mountain Lodge or the snack bar at Johnston Canyon Resort, you will have to either prepare your own meal, or drive 20-30 minutes to Banff or Lake Louise to dine. Nearest groceries are in Lake Louise and Banff.
Lake Louise
This is a small village. Excluding tourists, it has a population of about 1,000. Although it is classified as a permanent "settlement," it lacks the amenities of a true town. It has no hospital, school, or church. Yet, when you consider what a tiny place it is, it does have a handful of top notch restaurants. Its main claim to fame is that it is in the heart of highly scenic territory, and it is surrounded by stupendous hiking trails. In the summer it enables you to feel closer to nature than Banff townsite does. It is 45 minutes' drive from Banff townsite, 2¾ hours from Calgary Airport, and three hours from Jasper.
Advantage : Fabulous scenery and hiking options. A great place for rest and relaxation in the summer. A popular ski resort in the winter.
Disadvantage : The accommodations in Lake Louise tend to be more expensive than they are elsewhere in the Canadian Rockies. If you need medical attention, the nearest doctor, medical clinic, or hospital is in Banff, nearly an hour away. In the winter Lake Louise becomes just too quiet for some visitors, especially for non-skiers. As a non-skier, you can skate, ride a horsedrawn sleigh, and go for a dog sled ride. After two or three days, however, you will have run out of things to do.
Field
Field, BC, in Yoho National Park, is a very small village of about 200 people, and makes a good base for those who are interested in hiking in Yoho National Park.. There are no hotels in the village, but there are a small number of guest house and B&B accommodations. Dining options are limited to one restaurant in town, and one at a nearby luxury lodge. More dining options are available at Lake Louise, which is about a fifteen or twenty minute drive away, or in Banff, about an hour's drive.
Golden
Occasionally, people planning their trip to the Rockies will notice that Golden, BC is about the same distance from Lake Louise as Canmore (about 80 km) and consider basing their trip to Banff and Lake Louise out of Golden. Now that a major upgrade of the Trans-Canada Highway through a formerly-dangerous section has been completed, it may well be practical now. However, feedback from travellers who have tried this option is lacking at this time (July 2010).
Jasper
Jasper townsite has a population of approximately 4,500. If Goldilocks was choosing a mountain resort town, she might settle for Jasper - neither too big nor too small, neither too crowded nor too empty, in fact "just right." Many native Albertans say, "Jasper is what Banff used to be like when I was a child." Although Jasper primarily is a tourist resort town, it also serves as a maintenance depot for the Canadian National Railway Company. The CN employees inject into Jasper's population an element of authenticity that would not be there if it was purely a tourist town.
Advantages : Wonderful scenery, outdoor activities and on and on.
Disadvantage : It is a popular town, and it lacks a nearby town that can provide spill over accommodation in the way that Canmore can do for Banff townsite. Hence it can be difficult to find accommodation in Jasper townsite in the summer. The traveler needs to plan well ahead. Jasper townsite is four hours from Edmonton International Airport and 5½ hours from Calgary International Airport. That compares with Banff townsite's distance of two hours from Calgary Airport. Although that is listed here as a disadvantage, it is partly what keeps Jasper townsite quieter than Banff townsite, so is an indirect advantage.
Strategy
Since they are close enough to each other, any one of Canmore, Harvie Heights, Dead Man's Flats, Banff townsite, or Lake Louise can serve as a base for visiting the others. Jasper, however, is far enough away that it really is not feasible to visit it during a day trip from one of the other mountain resort towns. Therefore it is recommended that a visit to the Canadian Rockies that lasts more than a few days be split between Banff / Lake Louise (60% - 70%) and Jasper (30% - 40%).
Links
If you decide to stay in Banff, it may help you to read Inside Banff : Hotel Districts and Amenities. If you will be staying in Jasper, you may find it helpful to read Inside Jasper : Accommodation.