For me, as a DM, the "sweet spots" are 1st, 3rd, and 5th. 9 times out of 10, if I'm starting a "main" campaign, it's 1st level, no ifs, ands, or buts. (I've got nothing against ECL creatures, monsters, etc., but I like to start out simple.) In 2e I'd sometimes go as high as 2nd lvl, just beacuse the characters were so much more fragile and levelling took so much longer, but now 1000 xp are pretty easy to come by - and that 2nd level ding is the best feeling in the world, IMHO. The character history (and that inevitable first dead PC) are just too valuable to trade away.
If it's a relatively "rough-and-ready" campaign, or something that's only supposed to run for a limited time as a "second campaign", I'll go for 3rd level. Extra feat, 2nd level spells, you get the picture. For example, a backup campaign idea that's been bouncing around my head for awhile is one that's set in Thar, north of the Moonsea in the Forgotten Realms: All the PCs are barbarians, taken prisoner by a goblin tribe. They have to escape and fend for themselves in the steppes (needlesss to say, their village is sacked and burned when they get back there.) 1 level of barbarian required, otherwise you can't keep up with everybody else. (I.e., you either passed the trials of manhood, requiring you to run a certain speed and distance, fight to a certain level, etc, or you died.) This kind of thing requires a certain durability from the PCs, and they still have two class levels to play with for customization.
Then, some campaign concepts require a certain power level to start with; the city campaign I just started playing in is a good example. 5th level is when you start to have some pretty damn capable adventurers, it really is a different game past that point. I haven't used this myself, but I can see where it fits.