Generally, I write stories based in this world (I'm not usually a fantasy writer). However, sometimes I venture into that area (not so much, recently) - and world-creation is probably my favorite part of fantasy-story conception, or at least a close second.
When I work with new worlds, I try to be as detailed as I can be. From what I've read on this board, most people tend to let their needs (be they plot, character, setting, etc.) dictate the world; they create it around their plot or characters. I cannot do that.
As soon as I decide my story is going to take place in a different world, I set the plot aside and spend my time just developing the setting. This actually helps me more than building the world around my needs would, I think, because it gives me consistant rules and inspires me - I often come up with random details about the nature of the people/races in the world, the religions, the landscape, the history, the norms - and these things make me think about how my characters exist in relation to these things, how I can use them, or whether I even have to. It is a helpful tool not just in setting development, but in plot and character development as well.
Plus, I think world-building is fun. Sometimes I'll just start from the bottom and make them up without reason (i.e. I've nothing I particularly want to write about at the time); I've got a number of worlds unknown just sitting in my head, which I suppose is handy when I need something quick.
It's been a while since I made anything new, though. Perhaps I'll pick it up again; posting this made me somewhat nostalgic. smile