One of the best settings to see a musical festival is Telluride Valley Colorado. Each year they host the Telluride Blue Grass Festival in June. One year I did a double festival week and hit Bonnaroo the week before and then drove cross-country to Telluride to hit this festival the next weekend. What a week of music.
The best part about the Telluride Festival is the setting. Set in a beautiful Rocky Mountains in a mountain valley in the shadow of the Mt. Sneffel Wilderness, it is a gorgeous place to watch music and also do just about anything. It was great camping in town and waking up each morning in the ball field and seeing the mountains in the distance, and the mountain stream flowing past.
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