Hi ILoveupcakes,
If I were you I would definately go for the small community hospital - it sounds like a lovely place.
I had my daughter in a busy central London hospital and it was a horrible experience (apart from the safe and healthy arrival of my beautiful little girl).
They were very busy so even though i'm sure they were all lovely people and great mid-wives they just didn't have the time to spend with me and i felt very isolated and was left on my own a lot, and when they were there they were spending more time talking to the students than to me. I was induced due to high BP so I was strapped to a monitor so was confined to bed as well. As i was induced it was a very long slow labour so my husband was sent home at night to get some sleep and when it was time for him to come back in the early hours I had to ask midwife 3 times to call him as she was busy and forgot.
After the delivery they needed the room for someone else so before i had even really had any time with my baby and not been able to breastfeed which I had wanted to try and do straight away as I'd read that this was the best time to establish breastfeeding and bonding, I was ushered out of the room to the bathroom for a wash and when i got back they had my baby all dressed and in the cot and ready to go upstairs to the ante natal ward. I was still being sick from the gas and air and my head was still spinning from the birth and I just felt like I was totally out of control.
Naturally I wanted to leave and go home as soon as possible so i could get to know my baby but of course i had to wait until the dr had checked her and gave us the all clear which again because they were so busy and short staffed we had to wait hours.
Your local hospiral while maybe small have delivered thousands of babies i'm sure and will be equipped for all but the more uncommon complications.
I'm 30 weeks pregnant now and am planning a home birth as I just really don't want to go back to hospital again and be so out of control of what should be the most natural and enjoyable experience.
Good Luck