DFRPG puts a lot of stock in collaborative creation, and nowhere moreso than in settling on, and fleshing out the area where the story will take place. The ideal scenario is a few get-togethers where the group does nothing but decide on a location (the book emphasizes a city, but I've seen games where every character is a member of biker gang that go where they want) and then figure out what about that location is important to them. PbP is different from tabletop gaming in a lot of fundamental (and not immediately obvious) ways, but we can use the strengths of the medium, and work around the rest.
So let's imagine a group of people that plan to get together on two occasions. On the first, they talk about cities that they think would make a really atmospheric backdrop to the game. My tabletop uses the city where we all live, which is amazing in many ways. One of my favorite parts is using a real location in a significant part of the game, and then being reminded whenever I go there. Or, discovering things about my city because I researched them for the game. There is a butcher shop near my old apartment that I will never, ever be able to visit because of things that happened there in the game. I don't even want to talk about it.
So this group does some brainstorming, with everyone throwing out ideas of places. The GMs role here is less to contribute content (although they certainly can) than it is to manage the session, make sure no one gets marginalized and that all ideas are written down and considered. The GM wants to keep the group from focusing on anything for too long, you really only need a one or two line idea, and then the GM should decide when they've done enough brainstorming and need to take a hard look at the list of cities. Use whatever method works to winnow the list, and finally settle on something.
For my sake, let's assume they settle on Albany, NY. (http://en.wikipedia.org/wiki/Albany,_New_York) My hometown. Immediately everyone has ideas about what Albany is, and what it will mean to the game. This is fantastic, and exactly what you want. In DFRPG, there are a few key elements that make up a city, and a few different layers of scope.
The broadest scope you want to look at are the city's Themes and Threats.
A Theme is a perceived, general, reoccurring element of the city's narrative. Themes are Aspects, with all the mechanical powers of such, but they also serve to focus attention on the feelings and atmosphere you want to evoke. They can be completely made up, or (and this is more fun) it can be based as much in reality as you want. For example, one of Albany's Themes could be "Locus of Power". I'm not sure how widely known it is, (especially in NYC) but Albany is the capital of New York, not New York City. Albany is where the Legislature creates the laws that govern the state, and where the Governor sees them enforced. For all the money, culture, elegance, art, and sophistication of the Big Apple, Albany is where Mayor Bloomberg comes every year to negotiate the city's budget, and it's Albany that decides how all that tax revenue is spent. "Locus of Power" means that those that want a say in the law, and those that hope to influence the powerful are in Albany. That's a powerful and compelling narrative element. Themes can be about the city as a whole, or a specific portion of it "Arbor Hill Has Seen Better Days" or a group of people, "The Albany Police Are Understaffed and Under-equipped". What's important is to recognize that the Aspect isn't easily altered or removed in the short term and it will likely play a part in most of the stories you have to tell.
You want to settle on two or three themes, no more. They should be broad enough, and evocative enough that they immediately explain what (to the players) is dramatically important about the city. The GM will always have them in mind when they are crafting the adventures.
A Threat is usually a short term, more recent development about the city or some part of it. It is a person or monster or condition that will or is making things worse for the people in the city. It is usually able to be narrowed down to one person or group responsible, and killing or removing that focus would solve that specific problem. Sometimes the focus of the Threat has an agenda, such as a new crime lord who is trying to push another mob family out of the area. Other times its a monster that just kills, without any deeper intent. Keep in mind that killing a threat isn't always the best answer, especially when they might be keeping worse things at bay. There is always someone waiting to fill a power vacuum, and sometimes the devil you know is much better than the alternative. Reoccurring enemies can be a lot of fun.
A wonderful way to develop threats based on a real city is to read the crime section of that city's newspapers. It's like a plot bonanza.
When brainstorming Themes and Threats, resist the urge to tell their entire story. What you want to do is come up with a basic premise, "The new cemetery groundskeeper is a ghoul, and he's eating the corpses. How long before he branches out to visitors?" The GM will fill in the details, and the story will have a little mystery.
At this point, the tabletop group is probably wrapping up for the evening, having done a lot of work discussing and brainstorming and narrowing the list and voting. The GM sends them out with homework: "Do some research on Albany. Look at guidebooks and find the exceptional, special, dramatic, weird, or dark locations that inspire stories in you. Read up on the city's history, and make a note of the ghost stories, the legends that locals tell, your favorite places and things. Tell yourself a short little story about each of them, with the city's Themes in mind, and then bring them with you next time."
This group discussion isn't as well suited to PbP, unless you use some other medium to help bridge the time gap. Meet on skype or IM or something, but I'm sure you can immediately see how a message board medium is both more limiting and more powerful for brainstorming. There isn't immediate back and forth feedback on ideas as they emerge, but everyone can do some indepth creation and writing before anyone else can interrupt.
All this homework (in addition to being fun) prepares the players to suggest Locations and Faces for the Themes and Threats, as well as new Themes and Threats.
The group should give some thought to who the major players (groups and individuals) are in the city. In my tabletop group, one person wanted vampires, another wanted werewolves, and a third wanted a mob element. All of those things were added. We used the Themes and Threats to reflect those desires, and it was natural to begin assigning Faces to the Themes, Threats, and Locations
Let's look at the Theme "Locus of Power". I talked about how I wanted to show that Albany is where the law is crafted (I work for the NY Senate, it's on my mind). I decide to create a Threat called "The Golden Road". A campaign of intimidation is being waged on a specific Senator who is the author of a bill that gives more money to the Albany Police so they can crack down on drugs being smuggled through Albany from Canada. I did a quick google search for inspiration and came up with this: New York’s Attorney General reports 52 charged in drug trafficking bust (http://owegopennysaver.com/index.php/2012/03/28/new-yorks-attorney-general-reports-261-indicted-on-drug-trafficking-charges/) and the threat basically writes itself. I decide that more is going on than the newspaper knows, specifically a powerful vampire is managing "The Golden Road" to fund his other efforts in the city.
So immediately I have Faces (the NPCs who represent the Themes, Threats, and Locations in the city) to add to the "The Golden Road". They are "Ezekial", a mysterious and powerful vampire with his fingers in crime and politics, and "Senator Dukins" (I made him up, because I work for the Senate and I'm not stupid enough to use a real person but don't let that hold you back), the author of the bill that proposes to curtail Ezekial's income. Locations include the "787 Overpass", under which massive drug exchanges are made, Senator Dukins's apartment, where he lives when he has business in Albany, and where bizarre and horrifying things are happening to the good Senator, and Ezekial's hidden hideout.
Each of these things has Aspects to it, and it helps to keep notes. Senator Dukins has: "Tarnished Warrior", indicating that he's by no means an angel, but that he's sticking to his guns on this one, and "Family is the Most Important Thing" meaning that his extensive brood, many of whom occupy positions of power in the State are his strength, but also his vulnerability, should Ezekial decide to lean on them.
The Senator's Apartment has: "Ritzy and Recently Ransacked" as part of the intimidation effort, and "Police Presence" to show that the Senator is not without resources to call on. The police support what he's trying to do and are watching his place on their off hours and vacation time.
Can you see how each element suggests others, and you can get more and more specific about things as you note down the important points? Themes, Threats, Faces and Locations are the building blocks to a complete adventure, the resolution of which will alter the city to some degree.
As more of each of these elements are developed, you will begin to see ways in which they will combine and oppose each other, outside of what the characters are doing. Your city will begin to live, and have such a feeling of depth that playing there will be a joy, and feel really fulfilling.