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The best thing about using a Defender as a daily drive is that you get friendly waves from a much nicer class of person.:D
As you can see a lot of people are perfectly happy commuting in their 110s.
It depends a bit on what you expect and whether you are prepared to drive it more or less as it was intended to be driven.
Some people probably think anything less than a V8 luxury sport sedan is unacceptable as a daily drive.
I've had Defenders as my daily drive for the last 14 years or so. I haven't lived in a city but I've driven in them from time to time. Frankly it doesn't matter where I'm driving it, I wouldn't have anything else. I just love driving them.
I suppose it comes down to your own expectations, and also whether your other half (if you have one) will be happy driving one around town. Mine wasn't so we had to turn one of the Land Rovers into a Subaru :(. Wherever I'm going I much prefer to take the Defender. It's just more enjoyable to drive and more comfortable.
Will depend on you.
I went from a 97 fairlane ghia to the 130. Much nicer to drive but then I do 160km round trip mostly country highway.