Yes, it's based on New York.
Here's a good start for you (by the way, we're going to the Steinway Beer Garden on Friday night, so I'll take some pics).
There's also this:
» 8 Things ‘Grand Theft Auto IV’ Gets Wrong About New York City, Including Bagels (they've got the bagel thing down - we eat bagels for breakfast, and you can't find a single one in the game!)