The 2008 Mercer Quality of living survey is out, and European cities dominate the list. At #1 is Zurich, Switzerland (was also #1 in the 2007 survey), and Geneva, Switzerland is tied for #2 with Vienna, Austria.
In fact, speaking German seems to be a good indicator of quality of life. Along with Vienna and Zurich, other primarily-German speaking cities in the top 20 include Dusseldorf, Munich, Frankfurt, Bern, and Berlin.
Prague ranks #71 for quality of life, but does considerably better when ranked on personal safety, at #45.
As for North America, the list is led by Canadian cities (Vancouver is #4), with the top U.S. city being Honolulu, Hawaii at #28.
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