I went for rabbits, I prefer them over cat villagers in general, they're wayyyy cuter. But I think all-frog towns are the best!! And a previous poster mentioned doing an all-penguin town, that's such a neat idea ^_^
I'm a huge cat person irl, but I think you should do all rabbits. More diversity in personalities, less costly, plus it would be super cute to have a bunch of bunnies frolicking around all the time. I also like the way the rabbits look more than I like the way the bunnies look.
OMG Shep! He'd be awesome in a cat town. He's so laid back, they'd all be friends with him. Aw that's cute. If you had him in an all sheep town, that would be awesome too! How cute is that? lol Ok, sorry that just made me insanely giddy.
OK, so I chose cat town, because I wish I'd done that, so I think if I can, I'll do that next time around.
HOWEVER, there are a lot of cat towns, and not as many rabbit towns. Also, my favorite villager is Carmen, and I always try to talk people into meeting her and having her in their towns, so that would be another plus.
But really, now I just think you should do a sheep town with Shep. <3