There are two views. One is that the events took place in Central America. The other is that they occurred in North America. The best explanation of the Central American setting is John Sorenson's book: An Ancient American Setting for the Book of Mormon, published by FARMS. The best defense of the North American setting is Bruce Porter and Rod Meldrum's book Prophecies and Promises - The Book of Mormon and the United States of America. FARMS gave a very critical review of the Porter/Meldrum book.
I used to think this subject was unimportant enough to allow it to remain undecided. After reading both sides' arguments, I am inclined to believe it has more significance if you accept Bruce Porter and Rod Meldrum's view. If you accept their view, then Joseph Smith knew something more about the Book of Mormon's events than Sorenson advances. Also the fit of Book of Mormon prophecies into a highly focused unfolding of events also follows. In fact, the D&C comes into sharper focus when you accept the Porter/Meldrum view.
I am inclined to now view this as an important or very important issue (7 or 8 on my earlier scale). I think everyone ought to read those two books and decide the subject for themselves. Since the Sorenson book was written first, and the Porter/Meldrum book is somewhat a response to it, I think they should be read in that order.