There are two schools of thought on this. Many say the second floor where the bedrooms are because most of your laundry will come from there. But my theory is figure out where you spend the most time. I don't spend it in the bedroom, I spend it in the kitchen/living area. So I want to be close to the laundry so I won't be running up the stairs frequently changing the loads. That way you carry it down once and back up once.

I'd say the first floor. We used to live in a 2-story house, and we just didn't spend that much time upstairs. You come down in the morning, spend most of your time on the first floor, then go up for bed. That's a bit of a simplification, but the point that I'm making is that you'll spend more waking hours on the first floor than on the second floor, so put the laundry where it is convenient to be doing throughout the day.

We place the laundry next to the bedrooms in all our new house projects. When we renovated our own house in Seattle, we also carved out a small laundry next to the bedrooms. I highly recommend it!

I have mine downstairs, off the mudroom. I like it this way because, like Marilyn mentioned above, I don't have to go upstairs to change the loads. A laundry chute would have been nice, but it's ok carrying them downstairs