Turning my thoughts specifically to a Mystara setting (I'm also contemplating doing alternate versions for Enigmundia, and perhaps even a Red Tide version), I'm thinking of placing it in the western area of Karameikos, towards the base of the northern mountain ranges at the Riverfork Keep.
Element 01: Riverfork KeepThis is the most interesting place to put it for me, because it is not only so distant from the capital, but is also separated by rivers. This would suggest that certain bridges are needed to handle a certain volume of land traffic travel, and that some river-based transportation would make sense for transportation of raw materials. It also heightens the isolation of the keep. The rivers themselves might also suggest why and how humanoid clans would frequent this area (transportation and fresh water and food).
The proximity to the Blight Swamp, and the need to pass by areas threatened by the Black Eagle Barony are also a plus.
Element 02: Village of Hommlet
Luln could arguably perform the role of Hommlet, I prefer that Luln's very Mystara-specific plots related to the Black Eagle Barony's malevolence remain uncomplicated by its own formidable subplots.
I'd place Hommlet near the Riverfork Keep, but to the west, across the river Cruth. I'm toying with creating it as an important trading route that the Five Shires would prefer to use (to avoid the Black Eagle Barony, of course) despite the added distance and difficulty.
The Vaults of Pandius have a variety of adventure hooks for Irenke, a Hommlet clone created for Mystara by Joachin Menchaca.
Element 03: The Church of Tiamat
I was troubled a bit about using the cults in Red Tide, as I wanted to really do an entire Border Wardens instance in that setting as well -- and then Zak comes up with an interesting set of cults that feel more appropriate for the Mystara world because (a) it's about dragons; (b) it has a number of colors that include red; (c) it will make for interesting realizations when the PCs figure out what's going on after running into the various Tributary Temples of the Cult of Tiamat (The Red Hand, the Black Wing, The Pale Eye, The Jade Fang, The Cobalt Claw).
So, I'll just deal with the various Humanoid Clans instead while I wait for him to finish 'em all.
Element 04: The Humanoid Clans
Karameikos is known to have various clans of humanoids in the Cruth Lowlands -- some, it is said, are under the employ of the Black Eagle Baron himself. Here are some that would be interesting to encounter, as identified in the Vaults of Pandius article by Giampaolo Agosta:
- Greyslayers - a three-horde goblinoid tribe from the lowlands that often stray into the eastern reaches of the Five Shires. Rarely employed by the Black Eagle Baron due to the number of vendettas their clan has against many other humanoid clans. Their main strength comes from the substantial number of Cruth Ogres they are able to recruit, and a familiarity with poisons.
- Blackstone - a six-horde tribe that is a veteran and survivor of the wars with the Five Shires. It is the largest in the Cruth Lowlands, and is distinguished also by its fondness for smoking darker and stronger pipeweed than the Hin of the Five Shires, and -- surprisingly -- by its skill at mining (a gift from the days of warring against the dwarves).
- The Jagged Claw - a three- to four-horde tribe that are descended from the kings of Orthrong (which helps to explain their relative nobility when compared to other tribes.They live in the western Cruth Lowlands, north of the Greyslayer territory.