How to Build SEO'd Site Structure For Local Directory

[joesash]

Hey - I'm launching a directory site for local event vendors (venues, photographers, etc.). I want to make sure we get the URL structure right - here's what we're planning.

domain.com (all listings, all cities, all categories)
domain.com/directory/city (all listings in a city)
domain.com/directory/city/category-name (all listings in a categorgy, in a city)
domain.com/business-name (individual listings)

We going to use domain.com/venues for editorial content. domain.com/directory/venues will be all venue listings across all cities.

Basically we have editorial content in a bunch of categories (fashion, venues, invitations, etc.), and we have directory listings in the same categories. Also have cities.

Any ideas on how to best structure this to make Google happy would be appreciated.

Also considered chicago.domain.com type of approach?

Thanks,
Joe