I've been pretty blessed with some great stores when I've been in the hobby.
Hobby Corner--Laurel, MS (open for 30 years or so, until the owner died 10 years or so ago). He had several operating layouts, a wide selection of paints, kits, and materials. He was a railfan and modeler himself, so he had knowledge. He had a good selection of locos and kits (Athearn is mostly what I got from him). He was open 6 days a week, with Thursday being open until 10pm, I think. He was always kind and willing to teach kids like me some stuff.
Hobbytown USA, San Antonio, TX--I've found that most Hobbytowns can be a mixed bag, because the franchise owner will determine what is sold. Some Hobbytowns only have Bachmann or Model Power with a few Lionel sets, while others, like mine, will have a wide variety of both the above as well as scenery, electronics and decoders and DCC, track, and most major brands locomotives and rolling stock. They have both building kits and RTR preassembled buildings. The folks that work the train section are train enthusiasts too, either operationally or in the model building (superdetailing locomotives and rolling stock). They will do special orders, and are open 7 days a week. They sometimes run a buck or two cheaper than MSRP, and will mark down old stock that doesn't move fast enough.
Lone Star Trains, San Antonio, TX-- They have knowledgeable folks and a good selection of older items as well as some newer stuff. They have all scales, and will work on stuff if necessary. They are on the internet (unlike the other places here) but I've never bought from them online. They're only open 6 days a week now, and will do special orders.
Dibble's Hobbies, San Antonio, TX-- the store is about 1/2 trains, 1/2 models and game stuff. Lots of detail parts, decoders, paints, scratchbuilding supplies, and knowledgeable staff. If I need DCC help, Mike there is the man. Not as much rolling stock on the shelf or locomotives in the cases, but they will order anything they can get and a little discount on stuff. They're open 5 days a week (closed Sunday and Monday) and are not on the net, but I don't think they're hurting for business.
We had the Collectible Caboose in Cedar Park, TX, but they closed down last year after the owner passed away. It was another great store, even though most of it was gifts and other things the wives would prefer.
In just building mine, I know that layouts cost money and stock space, as well as taking up time for maintenance. I think that's one reason why many places don't have supercool layouts like the old days. In the current economy, stock costs a lot more and doesn't do anyone good sitting there until someone shows up to buy it, so I've noticed some places cut back on what they have. However, the staff makes a store. If the people are knowledgeable and enthusiastic about helping or making a special order, then I'll go back. If they don't have something, and can't get it, yet tell me where in town (a competitor) to go and who to ask for or talk to, then I'll recommend them to anyone who will listen.