A perfect practice area is really quite a personal space, designed around your personal learning style and really around your general psyche as a whole. It is really a reflection of who you are as a music student and your understanding of yourself and your learning needs.
As far as what the best place or area for a specific person in their home, I doubt anyone can really give an accurate answer because, above all else, your practice area has to be tailored to YOU.
What I will say is that your practice area should be an area that promotes relaxation, focus, concentration, physical comfort, and the ability to accurately hear what you are playing.
Relaxation helps to prevent physical tension, which can be harmful to developing a strong technique. Your practice environment should be a place where you feel relaxed or at ease.
Physical comfort is critical, as many of the worst technical habits on any instrument come from playing in an unsuitable physical environment. In other words, make sure you have a comfortable chair at an appropriate height (if you use a chair).
Focus/concentration is necessary to be able to get the greatest benefit out of your practice session. What this means depends on you - if extraneous noise distracts you, find a quiet place to practice. If visual motion distracts you, face away from windows, etc.
Auditory characteristics are important because the sound should be one of the most important indicators of your progress. However, I would personally shy away from practicing in an area that adds acoustic flavor to the music. For example, playing acoustic guitar in a bathroom can sound awesome, but this is partially because the reverb in the bathroom can mask some of the inconsistencies in your playing. To be able to truly critique your own sound while you play, it is better to shoot for an acoustically "dry" area. In addition, record yourself as much as possible for your "post-practice" review.
If there is any main point to my post that you should take away, it is that the only way to truly set up your perfect practice environment is to take the time to understand yourself, and what issues help or hinder your practice. What works for me may not work at all for you, and vice versa. Understand what you, personally, need from your practice environment and try it out, one thing at a time, until you feel you are truly able to phase everything else out.
One final thing I would suggest for any practice regimen - keep a timer handy. You will progress further and faster if you take regular breaks in your practice. This helps you maintain your mental focus while allowing you a physical rest period. I try to practice for 25 minutes, then rest for 5 - pomodoro style.