Seating charts are your friend!

Once you have chosen your show and know the theatre, go HERE for links to seating charts for each theater (where available).  Pay particular attention to the indication on the seating chart of where the mezzanine and balcony overhang the lower levels.

Orchestra

If you are short (like an elf :)), keep in mind that orchestra seating can be challenging because the pitch of the theater doesn't generally start to rise until about halfway up.  Booster cushions may be available~ask an usher.

Also, be wary of dead center orchestra if you're on the short side.  If there is a tall and/or broad person in front of you, you will be blocked straight on, and won't have the benefit of an angled view to compensate.

Closer up on the sides, close to the aisle, can be better than center orchestra farther back.

Check the theater seating chart to see where the mezzanine and balcony overhang the orchestra-if you're in the orchestra underneath the mezzanine/balcony overhang, your view of the top part of the stage sets may be restricted.  Also, the acoustics may be less desirable.

I will nearly always choose to be as close as possible, even if that means being fairly far over to one side or the other.  If I can't be in the first 7 rows, I'll then choose first row of the mezzanine.

Mezzanine

The mezzanine is different than the balcony-it is lower and closer to the stage (and front mezzanine seats are generally the same price as orchestra seats, while balcony seats are usually the least expensive).  
Mezzanine seating can offer a more panoramic view and, if you're in the first row or two, you'll often be closer to the stage than you would have been in the orchestra.  "I think that the front, center mezzanine is the best spot" says Elf Niece - "there you can see the whole stage without missing detail in the show."

Balcony

Always check to see if the theater has both a mezzanine and a balcony.  If so, the balcony will be higher and farther away.  However, there are some theaters that only have one upper level and it will likely be referred to as the "balcony."  Balcony seats, when there is also a mezzanine, are almost certainly going to be your least expensive option, but you might want to bring binoculars :).

Box Seats

A box seat, while it sounds exotic, is all the way over to one side or the other and it is likely that part of the stage and action will be out of sight for you at times, especially the closer to the stage you are.  Not every set is designed to be as effective from a severe angle.  The advantage can be less obstruction from audience members in front of you, and you're not as tightly packed in as you are in the other sections of the theater.  Some shows use the boxes as part of the set, or for musicians or technical purposes, and don't sell those seats.  However, there are times when a box seat is the best seat in the house :).

Premium Seats

If you have the money to pay for a premium seat, it can be worth it.  If this is a show where the cast is the reason I'm seeing it, or it's otherwise sold out, I'll pay for the best seats, if I can.  I have yet to regret a premium purchase, but if it was a choice between seeing two shows from decent seats, or one show from a premium seat, I'll surely pick two shows :).

Aisle Seats 

There are some common reasons people choose aisle seats whether orchestra, mezzanine or balcony: someone in the party has long legs; someone in the party has mobility issues; someone in the party is chronically late :).  But there are some other, less obvious, benefits that may apply to you: if you really want a good spot at the stage door after the show, an aisle seat on either end of a row will allow you to shoot out quickly after the final bows; or if you know or suspect you'll have tight timing for dinner or another show afterwards (a cabaret at 54 Below maybe?), having an aisle seat will reduce your stress and allow you to enjoy the show a bit more.  

Any Seat May Be Better Than No Seat

If you really want to see a show, and you've only got one or two options for days to see it, take the best seat you can and don't miss the show.  I've seen shows from less desirable seats and had a wonderful time.  Sure, I'd rather have been closer or with a better view, but I wouldn't have missed the show for it.