Firostefani is better overall location. You can easily walk to Fira for shops and restaurants in just 15 minutes. Imerovigli is 1.5 miles from Fira and it's an uphill walk all the way there, something you probably don't want to do after a full meal or in the summer heat.

That's exactly what I was looking for, thank you.

One further question---does it make sense to rent cars on the islands? I can't imagine how we'd get around to see the islands without a car. Buses just seem so complicated but, my concern is parking so buses would eliminate that factor. In this case, we are flying to Santorini from Athens. My plan was to pickup a car at the airport and drop it off at the port 3 days later prior to departing for Naxos.

Parking a car in Firostefani or Imerovigli in the high season can be very adventurous....

There are very few hotels that have parking space ( like Roccabella in Imerovigli).
The bus system of Santorini is excellent and not complicated at all...
Have a look at the website, they are on winter timetable, it will change to the better in the summer.

http://www.ktel-santorini.gr/

Parking is a problem in the main village of Fira as well, especially in High Season. But a car makes good sense. It gives you options you wouldn't have otherwise. Be sure to go to your local AAA office to pick up an International Driving Permit, for $20 plus a photo fee if you don't bring 2 passport photos with you. No test or membership required.

I've been going to the Greek Islands for years, and have not once rented a car. Already doing enough driving at home, I enjoy leaving that behind on my holidays and using the excellent island bus system instead. Santorini is very small, with the bus station in Fira the hub for all routes, so it's not complicated at all.

What I would do is wait until you get to Santorini and then make your decision. It could be that you will want to rent a car for a day, but probably won't need it for your entire stay on Santorini. If you are from the US get an IDP from AAA just in case.

The buses are not complicated at all but they do get very crowded. It's not always possible to get on the bus with hordes of tourists trying to get on them back to their cruise or whatever, panicking to get on. This was my experience so was glad to have rented a car straight from the airport from a local company in Kamari and kept it the whole time. This way we could get to places the buses do not go to, since we were only there a short time we wanted to make the most of it. We went in late July and could still find parking in Oia albeit a car park a little away from the centre. In terms of cost saving there was very little, by the time we paid for taxi to/from the airport and then various bus trips, it seemed to make sense to rent a car.

Thanks for your feedback about the car and whether or not to rent one. Interesting comments about an IDP. I've traveled to Europe many times and have never gotten an IDP. I've also never been stopped or had any issues. Just curious why I'd need one here. Do they require them in order to rent a car?

It's the law, and even if a rental company sometimes doesn't ask for it if you get in an accident you'll be in serious trouble with the police and your insurance will be invalidated because you will have been driving illegally, which puts you on the hook for any and all damages to all vehicles involved. It's either that or spending $20.

Each country has different rules regarding the IDP, and you can find them in the Country Specific Information on http://travel.state.gov/travel/travel_1744.html. For example, UK, Netherlands and Germany don't require US license holders to have an IDP, while Italy and Greece do.

I guess I need to get an IDP. Thanks for your input.