Going first week of September.

Looks like a lot of things to do around Ku'damm/Tiergarten/Mitte.

Is there a big advantage in being nearer the attractions since Berlin is reputed to be so big?

Further out from the "center" the vacation apratments appear to be cheaper, as one might expect. But for a 5-night stay, reducing transit times may be worth the premium.

scrb--I am going to Berlin next month and just posted a question that provided a lot of good info on Berlin and environs. Click on my name and you can find my post. Hope that helps. . .

I would certainly recommend staying closer to the center of things than on the outskirts.

Berlin comprises indeed of a very vast area and you will save lots of precious time if you are closer to the attractions.

In general there are three areas which I think are quite suitable for tourists:

Mitte: The former center of East Berlin has become the new fashionable tourist and business district. Brandenburg Gate, Museum Island, Gendarmenmarkt and Checkpoint Charlie, among others are easily accessible.

Charlottenburg: The center of West Berlin suffered a bit from the new competition of Mitte initially, but is now in the process of establishing itself in its new postion as one of two city centres. There is some sort of neighbourhood feel to the area, particularly in the side streets of Ku'damm. Gedaechtniskirche, Ku'damm, Charlottenburg Palace are among the sights.

Potsdamer Platz: Formerly right in the middle of the death strip separating the two city halves, it has been completely re-built and a bit of artificial feal about it. Still, there is some interesting modern architecture around. While it's touristy, it is so for a reason as both city centres of the East and West are easily accessible. The Jewish Memorial site and the Brandenburg Gate are within easy walking distance as is the Reichstag.

How about the area just north of Tiergarten? Frommers seems to list that area favorably as well as the area around Savignyplatz.

I prefer the Ku’Damm area, myself, but no matter where you stay in Berlin, you’ll have to travel to see different sights. (sites?) IF you wish to stay off the beaten path you could check out Hotel Ravenna, a small hotel in the Steglitz area, close to both S and U bahn and near a nice shopping area. Here’s a link:

http://tinyurl.com/g6vvt

Most important is that you are close to an U-Bahn or S-Bahn station. Even if you are far away from one of the three city centers (Berlin has three centers: Ku'damm, Mitte and Potsdamer Platz) you will easily reach any point of interest by train.
The most upscale neighborhoods are in the southwestern part of the city: Grunewald, Dahlem, Zehlendorf, Wilmersdorf, Charlottenburg...
In this area, you will be halfway between Berlin-Mitte and Potsdam (which is also worth a visit).
East Berlin is mostly barren, with high-rise buildings. Interesting neighborhoods with a good scene and charming old houses are Prenzlauer Berg and Friedrichshain.

While I agree with quite a bit of the advice you are receiving here, I find it hard to imagine Charlottenburg being located in the Southwest of the city center. Charlottenburg is smack dab in the thick of things of West Berlin - and if you look at a map of Berlin as a whole even in the middle (if slightly West, but in no event in the Southwest) of it.

While Dahlem, Zehlendorf and Grunewald may be nice residential neighbourhoods, I would not necessarily recommend to stay in one of them. Even with access to public transport (which is rather efficient) they are too far off the main track for a tourist who wants to enjoy the city sights.
Stick to Charlottenburg, Mitte or Potsdamer Platz!