For "in town" adventures with a lot of info-gathering, investigation, and roleplayed negotiations and interrogations I've found fewer players (1 to 3) is better -- any more than that and people will spend too much time sitting around not doing anything and getting bored.
For more action-oriented dungeon and wilderness adventuring more players (4 to 8, with 5-6 being the "sweet spot" IMO) is better -- everybody can get in on the action (be it combat or problem-solving) and the greater quantity and variety of resources and approaches helps the game.
I've only once GMed a group of more than 8 players and it was pretty much a disaster. Perhaps if, as Ourph mentions, I'd been running a scenario deliberately designed for such a large group and turned it into more of a large-scale wargame-type exercise it would've worked better.
4 players is a good compromise between the two extremes (not too many players for town/rp-heavy adventures, not too few for dungeon/wilderness/action-oriented adventures) if you're planning to have the exact same group of players at every session. However, players in my experience (especially adult players who actually have lives) will tend to miss sessions with some regularity (myself included) so even if 4 players is your ideal, it's probably still best to have more than that (6 or so) in the campaign so that given the inevitable cancellations you'll still get 4-5 players per session. If you've only got 4 players then you either have to be very strict about attendance or resign yourself to the fact that most sessions are actually going to have 2-3 players with an NPC'd character or two tagging along.
In the 80s my number of players fluctuated wildly between 1 and 8+. In the 90s this stabilized to 5 regular players with 2 or 3 more irregular "guest players" who would sit in occasionally -- we rarely had more than 6 at the table at once, and I don't think we ever had all 8. My current group also has 8 total players but since almost all of us (me included) have pretty spotty attendance the average players per session is usually in the 4-6 range (last session had 6, the two before that were canceled for the holidays, and the one before that had 5).