In general, where you live will be dictated by where you work, or where your children will go to school. It is good therefore, to hire a serviced apartment for the first couple of months in order that you can look around and find something you like.
Kathmandu is basically divided into the north of the city (Thamel, the Palace etc.) and the south (Patan, UN House etc.). These areas are separated by the Bagmati River. The ring road circles the city but it is often just as crowded as the inner city roads. Traffic moves faster on the ring road and therefore the possibility of accidents is higher. Again, with the increase in traffic over recent years, it is a challenge to make that short journey (10-15 minutes on an empty road) during office hours (allow an hour during peak times). Therefore, people do normally live near to where they work.