Both cities meet your requirements. But Dresden wins, hands down.

There are more very interesting small towns in the region around Dresden, more castles/palaces/gardens, they are closer and are easier to reach by train/bus.

The landscape around Dresden is more attractive - even in the city itself: vineyards, green hills dotted with 19th century villas and older manors etc. Then there's the National Park Saxon Switzerland with the bizarre sandstone rock formations, canyons, cute villages and more than 1,000 km hiking trails, accessible by suburban railway.

Rates for accommodations are about the same, Dresden maybe a little more expensive, but not by much.

Both Leipzig and Dresden are really interesting cities in their own right and both have their own constellations of cities that are interesting to visit. Leipzig is buzzy. Near Leipzig you have Halle, Erfurt, Weimar and Jena, Weimar being the really big drawcard for German tourists with its meritorious cultural history, and maybe also Wörlitz near Dessau, which has an 18th? century English-style garden. (Bitterfeld, on the way, is said to be very polluted, or at least, it was in the 90s.) Leipzig also has big parks, one of which has the Völkerschlachtdenkmal, a war memorial from 1913. But Dresden has IMO more to keep the visitor busy, bigger city, more museums, it has the river with its cruises, excursions to Saxon Switzerland, Meissen and Görlitz (the latter of which I haven't been to, but I hear it's very beautiful - it's near the top of my wish list). Dresden also has beautiful buildings, not sure about parks. I'd probably pick Dresden myself, based on the fact that there's more in that city to keep busy with, but I would be interested to hear Ingo's opinion. Also do a search on Dresden as there are some really interesting threads. This is one of them (I know it's probably the wrong season but will give you some good ideas):

http://www.fodors.com/community/europe/dresden-and-area-christmas-markets-ingo-bitte.cfm

Lavandula

Oops, I was writing as Ingo was posting!

Lavandula

I visited Dresden and Leipzig three months ago. I would also say Dresden. Dresden old city core is compact. I enjoyed photographing the magnificent Frauenkirche under different illumination conditions. I like visiting porcelain factories, so I did an easy day trip to Meissen. It is a big bus tour stop, so it gets very crowded during the day.

Leipzig felt more like a busy university town.

I really liked Leipzig, but I'd probably say Dresden, also, as a base.

Thanks, everybody. Looks like Dresden is the clear winner!

Leipzig also has big parks, one of which has the Völkerschlachtdenkmal, a war memorial from 1913.>>

I wouldn't go to Leipzig to see this - it's pretty ugly. but we did like it, as we liked Dresden.

there is a lot to see in and around both - but possibly because of the scenery Dresden just has it.