It really depends upon your objectives; do you want to use your space efficiently, and take a severe Happiness penalty, or would you rather keep your villagers happy and sacrifice space? The main issue is, your use of roads will have the strongest effect either way.
My favoured method for Evil/Neutral play utilizes the 'Serpentine/Medusa' style of road building. I construct a long, organically-curving (yet still straight; no looping around itself) road that extends as far as my influence allows. I then set down house after house after house along its entire length, creating a somewhat miserable stretch of land. This method ensured the road is used efficiently, and allows me to wedge Temples, Taverns, and Fields in between tightly-packed clusters of houses, branching off of roads that radiate outward from the central hub of the Town Centre. This method is slightly less efficient than uninspired, linear, gridlike roads, but makes playing Evil more fun when interspersed with Evil embellishments. In fact, I've even won towns using this style, saving greatly on the cost of fresh soldiers, and gaining tribute in the process.
My Good method utilizes a style of building that resemles the branching of a tree from its trunk (as if viewed from above with some leaves removed); the roads are very curvy and organic; the houses form the leaves, with civic buildings 'fleshing them out' like leafy patches and thicker branches, so as to increase Happiness and Impressiveness. However, it's hideously inefficient, and requires liberal use of expensive Civics like Temples, Universities, and the like, whenever population pressure due to migration reaches critical levels (and the number of houses per road begins to add up)... often ending up with more villages taken, and more mouths to feed/bodies to shelter.
Either way, keep an eye out for any useful data when building; structure is important, with liberal use of roads being key to efficiency and success, and skillful use of Impressive areas and housing hierarchies... then again, no one strategy works poorly, as long as you're handy with the Destruction Tool and have resources to spare.