I've lived almost my whole life in a desert area, and have a love/hate relationship with the desert. On the one hand, I love green and trees and rivers with actual water in them and seasons, and I hate the heat. Hate, hate, hate it. On the other hand, there are green and trees and water and season in the desert, they're just a lot more subtle, and you have to learn how to see them. The desert can be spectacularly beautiful, or spectacularly ugly, at first glance, but as you observe it more, you uncover more layers and depths. Things are hidden here, buried, waiting until conditions are right to come out in the open. We may not get spectacular fall foliage (though if you're down by the wash, you'll see some beautiful yellow cottonwoods), but you can tell it's autumn by the color of the light on the mountains.
Though the desert might look barren, it's actually teeming with unseen layers of life. Plants and animals have adapted to the unforgiving conditions, to take in what's available when it's available and conserve as much as they can, to defend themelves, to wait patiently through the heat and drought until the cool of evening, or the cool of winter, or the rainy season, to come out and show themelves. Humans, also, have managed to survive in the desert for thousands of years. Some civilizations still exist, others lasted for hundreds or thousands of years and then died out or suddenly disappeared.
The desert has secrets, and power, and history, and beauty, which unfold themselves to those who are open to seeing it. Desert scenery varies widely, from endless stretches of sand to thick growths of cacti, desert trees, and wildflowers. The challenges it presents for survival are unique, and the cultures that grow from it are uniquely adapted to the demands of life in the harsh conditions. When you look at it that way, what more magical setting could there be for fantasy? Or one so rich in possibilities? But it doesn't seem to be all that common in fantasy novels, perhaps because a lot of fantasy is still based on a medieval-Europe-type setting. This isn't univerally true, though, and seems to be changing more in recent years. A few novels that I can think of right off hand that take place, at least in part, in a desert setting are The Tombs of Atuan (Book 2 of the Earthsea series) by Ursula K. Leguin (one of my childhood favorites), Empress (Book 1 of the Godspeaker Trilogy) by Karen Miller, and two of the four novels I've read so far in the Malazan Book of the Fallen series by Steven Erikson: Deadhouse Gates and House of Chains.
In my own writing, I also frequently use desert settings. Urdaisunia is entirely set in a desert land, and significant events in Chosen of Azara and The Lost Book of Anggird also take place in desert areas. I can't envision these events taking place in any other environment. There's just something about them that demands the harsh environment and layers of mystery of the desert. Although not all of my novels feature desert settings, if I had to think of a landscape that most nearly represented my writing, it would be the desert.
Okay. So what about the elves, fairies, and dragons?
Well, for some reason, they never seem to make it into my novels. But that's another blog post for another time.